The provisions relating to prosecution for failure to deposit Tax Deducted at Source (TDS) to the credit of the Central Government have been restructured under the Income-tax Act, 2025. The earlier Section 276B of the Income-tax Act, 1961 is now covered under Section 476, effective from 1st April, 2026.
This restructuring retains the consequences for non-payment or delayed payment of TDS while incorporating recent amendments that provide relief where tax is deposited within the extended compliance timelines.
Quick Reference – Section Mapping & Reporting
- New Section (IT Act 2025): Section 476
- Nature of Provision: Failure to pay tax to the credit of the Central Government under Chapter XIX-B
- Earlier Section (IT Act 1961): Section 276B
Obligation to Deposit TDS
Any person responsible for deducting tax at source under Chapter XVII-B is required to deposit the deducted amount to the credit of the Central Government within the prescribed time.
Consequences of Non-Compliance
Failure to remit TDS within the specified time may result in:
- Imprisonment: Minimum of 3 months and up to 7 years
- Fine: As determined by the authorities
Section 476 – Prosecution Provision: Then vs Now
| Aspect | Before Amendment (Up to 30-Sep-2024) | After Amendment (From 01-Oct-2024) |
|---|---|---|
| Trigger for Prosecution | Prosecution could be initiated for any delay, even of one day | Prosecution cannot be initiated if TDS is deposited before TDS return due date |
| TDS Paid Within Due Date | No prosecution | No prosecution |
| TDS Paid Late but Before Return Due Date | Prosecution could still be initiated | No prosecution |
| TDS Paid After Return Due Date | Prosecution possible | Prosecution possible |
| Discretion | Any delay could lead to prosecution | Defined safe window available |
| Interest & Late Fees | Always applicable | Still applicable |
| Prosecution Window | Starts immediately after due date | Starts after return due date |
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