Section 271C → Section 350
Penalty for failure to deduct tax at source (TDS)
Quick Answer
Section 271C of the Income Tax Act, 1961 (Penalty for failure to deduct tax at source (TDS)) corresponds to Section 350 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 271C
Section 271C of the 1961 Act sets out the rules on penalty for failure to deduct tax at source (TDS). Penalty equal to the amount of TDS not deducted.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 271C is retained and renumbered as Section 350 of the Income-tax Act, 2025. Retained. This is in addition to the interest under 201(1A).
The transition impact on Section 271C is assessed as High. Major risk for businesses with large vendor payouts.
Sec 271C
Provision Summary
Penalty equal to the amount of TDS not deducted.
Sec 350
Provision Summary
Retained. This is in addition to the interest under 201(1A).
Key Changes & Highlights
- Includes penalties for failure to pay TDS on virtual digital assets (194S).
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Frequently Asked Questions
Which subject does Section 271C of the 1961 Act cover?
Section 271C of the Income Tax Act, 1961 covers penalty for failure to deduct tax at source (TDS). Penalty equal to the amount of TDS not deducted.
What is the new section number for Section 271C under the Income-tax Act, 2025?
Section 271C of the Income Tax Act, 1961 maps to Section 350 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. This is in addition to the interest under 201(1A).
How does the Income-tax Act, 2025 affect Section 271C in practice?
The transition impact for Section 271C is rated High. Major risk for businesses with large vendor payouts.
What is new about Section 271C under the Income-tax Act, 2025?
Includes penalties for failure to pay TDS on virtual digital assets (194S). These points are specific to Section 271C (Penalty for failure to deduct tax at source (TDS)).
Disclaimer: This mapping of Section 271C (Penalty for failure to deduct tax at source (TDS)) to Section 350 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 271C is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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