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CMA Intermediate · Direct and Indirect Taxation · Tax Deducted at Source and Tax Collected at Source

Under the Income-tax Act, 2025 as amended w.e.f. 1-4-2026, a collector fails to pay to the Government TCS of ₹12,00,000 that he collected, and does not pay it even by the time prescribed for filing the statement. What is the maximum punishment for this default?

The punishment is simple imprisonment up to six months, or fine, or both. The unpaid TCS of ₹12 lakh lies between ₹10 lakh and ₹50 lakh, which is the band covered by section 477(1)(b). The old rigorous imprisonment provision has been replaced.

  1. AFine only
  2. BSimple imprisonment up to six months, or fine, or bothCorrect
  3. CSimple imprisonment up to two years, or fine, or both
  4. DRigorous imprisonment of three months to seven years, and fine

Explanation

Section 477(1)(b) applies where the uncredited tax exceeds ₹10 lakh but not ₹50 lakh: simple imprisonment up to six months, or fine, or both. ₹12 lakh falls in this band. Two years applies only above ₹50 lakh, and the rigorous imprisonment option is the pre-amendment rule that has been substituted.

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