Section 428 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 428 imposes a fee, payable without prejudice to the rest of the Act, on a person who does not furnish the return of income on time, who furnishes a return after nine months from the end of the tax year, who does not get accounts audited and furnish the report, or who does not furnish an accountant's report. This article explains the section as per the Income-tax Act, 2025 as amended by the Finance Act, 2026.
Later amendments, rules and notifications should be checked before you act. If a return is overdue, our income tax return filing service can file it. The Finance Act, 2026 substituted section 428 (together with section 427), with effect from 1-4-2026, as the footnote to the section prints.
The fee for a late return is Rs. 1,000 if total income does not exceed Rs. 5,00,000 and Rs. 5,000 in any other case. The same two amounts apply to a return furnished under section 263(5) after nine months from the end of the tax year. The fee for not getting accounts audited under section 63 is Rs. 75,000 for a delay up to one month and Rs. 1,50,000 thereafter; the fee for a missing accountant's report under section 172 is Rs. 50,000 and Rs. 1,00,000 on the same pattern.
What section 428 says
The section begins "Without prejudice to the provisions of this Act, where any person" does one of four things, "he shall be liable to pay by way of fee". The four clauses are:
| Clause | Default | Fee |
|---|---|---|
| (a) | Person required to furnish a return under section 263 fails to do so within the due date in section 263(1) | (i) Rs. 1,000 if total income does not exceed Rs. 5,00,000; (ii) Rs. 5,000 in any other case |
| (b) | Furnishes a return under section 263(5) beyond nine months from the end of the relevant tax year | (i) Rs. 1,000 if total income does not exceed Rs. 5,00,000; (ii) Rs. 5,000 in any other case |
| (c) | Fails to get accounts audited for any tax year or years and to furnish the audit report as required under section 63 | (i) Rs. 75,000 for a delay up to one month for which the failure continues; (ii) Rs. 1,50,000 thereafter |
| (d) | Fails to furnish a report from an accountant as required by section 172 | (i) Rs. 50,000 for a delay up to one month for which the failure continues; (ii) Rs. 1,00,000 thereafter |
Clauses (a) and (b) turn on the total income of the person. The threshold is Rs. 5,00,000: a person whose total income does not exceed that figure pays the lower fee. Clauses (c) and (d) do not use a total income test; they use the length of the delay.
The return fee: clauses (a) and (b)
Clause (a) applies when a person who must furnish a return under section 263 does not do so within the due date specified in section 263(1). Clause (b) applies when a return is furnished under section 263(5) beyond nine months from the end of the relevant tax year. Section 263 is explained in our posts on who must file and the due dates and on belated, revised, updated and defective returns. If you need the return filed, see our income tax return filing service.
The text of the section does not say that the fee is reduced by tax already paid, nor that it is a proportion of the tax; it prints only the two amounts.
The audit and accountant's report fees: clauses (c) and (d)
Clause (c) refers to a person who "fails to get his accounts audited for any tax year or years and furnish the report of such audit as required under section 63". Section 63 is the tax audit provision; see our section 63 article. The fee has two steps: Rs. 75,000 for a delay up to one month for which the failure continues, and Rs. 1,50,000 thereafter.
Clause (d) refers to a failure to furnish a report from an accountant as required by section 172. The fee is Rs. 50,000 for a delay up to one month and Rs. 1,00,000 thereafter. The Act does not define "delay" in this section beyond the words printed; the time within which the audit report and accountant's report are due is fixed by sections 63 and 172 and the rules made under them.
What the Finance Act, 2026 did
The footnote to sections 427 and 428 states that they were substituted by the Finance Act, 2026, with effect from 1-4-2026. The section as it now stands has the four clauses shown above, including the two fees for audit and accountant's report defaults in clauses (c) and (d).
Related fees in neighbouring sections
Section 427 prints a fee of Rs. 200 for every day of failure to deliver a statement under section 397(3)(b), limited to the tax deductible or collectible, and (in sub-section (3)) the same daily amount, capped at Rs. 1,00,000, for a statement of financial transaction or reportable account under section 508. Sections 429 and 430 deal with fees for statements, certificates and the Aadhaar intimation; see sections 426, 427, 429 and 430. Interest for default in furnishing a return is in section 423.
A worked example
All amounts are assumed; names are invented. Kavita Joshi, a resident individual, has total income of Rs. 4,20,000 for a tax year and furnishes her return after the due date in section 263(1). Her total income does not exceed Rs. 5,00,000, so clause (a)(i) applies and the fee is Rs. 1,000. Had her total income been Rs. 6,50,000, clause (a)(ii) would apply and the fee would be Rs. 5,000.
Ravi Menon Traders, whose accounts are required to be audited under section 63, gets the audit done and furnishes the report within one month of the due date. Clause (c)(i) applies and the fee is Rs. 75,000. If the report were still pending after that month, the fee under clause (c)(ii) would be Rs. 1,50,000.
Practical points
- The fee is separate from interest and from penalty; the section opens "Without prejudice to the provisions of this Act".
- A return furnished under section 263(5) after nine months from the end of the tax year attracts the same fee as a return not furnished by the due date, so the clauses should be read together.
- Section 428 itself prints no power to reduce or waive the fee; any relief would have to be found elsewhere in the Act or the rules, which should be checked.
Need help with late filings?
If a return or an audit report is overdue, speak to us before the fee grows from the lower to the higher step. Our books of accounts compliance service covers the accounts side that leads to an audit report.
Key takeaways
- Late return fee: Rs. 1,000 up to total income of Rs. 5,00,000; Rs. 5,000 otherwise.
- Return furnished under section 263(5) after nine months: same two amounts.
- Audit default under section 63: Rs. 75,000, then Rs. 1,50,000.
- Accountant's report default under section 172: Rs. 50,000, then Rs. 1,00,000.
- Section substituted by the Finance Act, 2026, with effect from 1-4-2026.
Read next
- Section 423: interest for default in furnishing return of income
- Section 263: who must file a return and the due dates
- Section 63: tax audit
- Section 424: interest for advance tax default
- Income-tax Act 2025, Chapter XIX: collection and recovery of tax
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.