Section 278B → Section 390
Offenses by companies
Quick Answer
Section 278B of the Income Tax Act, 1961 (Offenses by companies) corresponds to Section 390 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 278B
Section 278B of the 1961 Act sets out the rules on offenses by companies. If a company commits an offense, every person in charge (Directors, Managers) is deemed guilty.
The new code maps this to Section 390: the provision is retained and renumbered as Section 390 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. This is the vicarious liability section.
On the ground, changes to Section 278B carry a Critical impact. Defines who goes to jail in corporate tax crimes.
Sec 278B
Provision Summary
If a company commits an offense, every person in charge (Directors, Managers) is deemed guilty.
Sec 390
Provision Summary
Retained. This is the vicarious liability section.
Key Changes & Highlights
- Independent and Non-Executive directors are generally excluded unless they were actively involved.
Frequently Asked Questions
What does Section 278B of the Income Tax Act 1961 deal with?
Section 278B of the Income Tax Act, 1961 covers offenses by companies. If a company commits an offense, every person in charge (Directors, Managers) is deemed guilty.
Where does Section 278B of the ITA 1961 go under the Income-tax Act, 2025?
Section 278B of the Income Tax Act, 1961 maps to Section 390 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. This is the vicarious liability section.
Why does the change to Section 278B matter for taxpayers?
The transition impact for Section 278B is rated Critical. Defines who goes to jail in corporate tax crimes.
What are the key changes to Section 278B under the Income-tax Act, 2025?
Independent and Non-Executive directors are generally excluded unless they were actively involved. These points are specific to Section 278B (Offenses by companies).
Disclaimer: This mapping of Section 278B (Offenses by companies) to Section 390 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 278B is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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