Section 428 — Fee for default in furnishing return of income, audited accounts and reports. Successor to s.234F of the 1961 Act.
Section 428 is in Chapter XIX — Collection and Recovery of Tax, which runs from section 390 to section 430.
It imposes a fee, without prejudice to the rest of the Act, for four filing failures. Clause (a): failing to furnish the return required by section 263 within the due date under section 263(1) attracts Rs. 1,000 where total income does not exceed Rs. 5,00,000 and Rs. 5,000 in any other case. Clause (b): furnishing a return under section 263(5) beyond nine months from the end of the relevant tax year attracts the same Rs. 1,000 or Rs. 5,000 split. Clause (c): failing to get accounts audited and furnish the audit report required by section 63 attracts Rs. 75,000 for a delay of up to one month and Rs. 1,50,000 thereafter. Clause (d): failing to furnish the accountant's report required by section 172 attracts Rs. 50,000 for a delay of up to one month and Rs. 1,00,000 thereafter.
Late or missing returns and reports are met with a fixed fee that does not depend on the tax involved or on any finding of default, so the charge is automatic and predictable. Scaling the return fee by income keeps it proportionate, while the audit and transfer pricing report fees are set much higher because those documents underpin the assessment itself.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Fee for late return under section 263 | Rs. 1,000 | Where the total income of the person does not exceed Rs. 5,00,000 | 428(a)(i) |
| Fee for late return under section 263 | Rs. 5,000 | In any other case, that is where total income exceeds Rs. 5,00,000 | 428(a)(ii) |
| Fee for a section 263(5) return filed late | Rs. 1,000 or Rs. 5,000 | Rs. 1,000 where total income does not exceed Rs. 5,00,000, otherwise Rs. 5,000; triggered by furnishing the return beyond nine months from the end of the relevant tax year | 428(b) |
| Fee for failure to get accounts audited and furnish the report under section 63 | Rs. 75,000 | For a delay of up to one month for which the failure continues | 428(c)(i) |
| Fee for continuing failure on the section 63 audit report | Rs. 1,50,000 | For delay beyond one month | 428(c)(ii) |
| Fee for failure to furnish the accountant's report under section 172 | Rs. 50,000 | For a delay of up to one month for which the failure continues | 428(d)(i) |
| Fee for continuing failure on the section 172 report | Rs. 1,00,000 | For delay beyond one month | 428(d)(ii) |
The return fee is small and turns on a single income line — Rs. 1,000 up to Rs. 5,00,000 of total income and Rs. 5,000 above it — and clause (b) adds a separate trigger for a section 263(5) return filed more than nine months after the tax year ends. The audit and transfer pricing report fees are of a different order and step up sharply: the second tier of Rs. 1,50,000 under clause (c) and Rs. 1,00,000 under clause (d) applies once the delay passes one month, so a report filed thirty-five days late costs double the one filed on day twenty-five. The opening words make clear this is on top of anything else the Act provides, so a fee here does not displace penalty or interest elsewhere.
An individual with a total income of Rs. 7,00,000 misses the due date under section 263(1): the fee is Rs. 5,000, not the Rs. 1,000 that would have applied had his total income not exceeded Rs. 5,00,000. A company that furnishes the section 63 audit report twenty-five days late pays Rs. 75,000, but at thirty-five days the same failure costs Rs. 1,50,000, because clause (c) sets two flat tiers and not a running monthly charge; clause (d) behaves identically at Rs. 50,000 and Rs. 1,00,000 for the accountant's report under section 172. Clause (b) adds a charge of its own on a return furnished under section 263(5) beyond nine months from the end of the tax year — and all of it, the opening words say, is without prejudice to any other consequence under the Act.
In the computation attached to a belated return, where the fee is paid before filing, and in the intimation or notice of demand that raises it if it was not. The section names no authority and no form; what fixes the amount is the total income figure and the number of days of delay.
fails to get his accounts audited for any tax year or years and furnish the report of such audit as required under section 63, he shall be liable to pay by way of fee,–– (i) a sum of Rs. 75000 for a delay up to one month for which such failure continues; and (ii) a sum of Rs. 150000 thereafter
See the full 1961 to 2025 concordance.