Sections 448 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.
Six short sections in Chapter XXI set penalties that are measured by the amount involved. Sections 448 and 449 charge a penalty equal to the tax that was not deducted, paid or collected. Sections 450, 451 and 453 charge a penalty equal to the loan, deposit or sum involved in a breach of section 185, 186 or 188, and section 452 charges Rs. 5,000 a day for not providing a prescribed electronic mode of payment under section 187. This article follows the text as per the Income-tax Act, 2025 as amended by the Finance Act, 2026. If you deduct tax at source and want your position checked, see our TDS compliance service.
A person who fails to deduct tax, or to pay it as the listed provisions require, may be penalised by the Assessing Officer an amount equal to the tax not deducted or paid (section 448); the same measure applies to tax not collected (section 449). A breach of the limits on cash loans and deposits, cash receipts or loan repayments attracts a penalty equal to the amount involved (sections 450, 451, 453). Not offering the prescribed electronic payment modes attracts Rs. 5,000 for every day (section 452).
Section 448: failure to deduct or pay tax at source
If any person fails to:
- (a) deduct the whole or any part of the tax as required under Chapter XIX-B (the reference as printed in the Act); or
- (b) pay or ensure the payment of the whole or any part of the tax as required by or under (i) Note 2 below the Table in section 393(3), or (ii) Note 6 to section 393(1) (Table: serial number 8),
then the Assessing Officer may impose on him a penalty equal to the tax which such person failed to deduct or pay or ensure payment of.
Three points of reading.
- The penalty is discretionary ("may impose").
- Clause (a) covers any deduction required in the deduction provisions; clause (b) is limited to the two Notes named. What those Notes say is in section 393 and our post on section 393.
- The measure is the tax itself, not a multiple. If the tax was deducted but not paid, interest and default consequences arise under section 398; see our post on section 398.
Example (amounts assumed). Delta Infra Pvt Ltd failed to deduct tax of Rs. 40,000 on a payment that required deduction. The Assessing Officer may impose a penalty of Rs. 40,000, equal to the tax it failed to deduct.
Section 449: failure to collect tax at source
If any person fails to collect the whole or any part of the tax as required under Chapter XIX-B (as printed), the Assessing Officer may impose on him a penalty equal to the tax which such person failed to collect. The collection duty is in section 394; the penalty follows the same measure as section 448.
Example (amounts assumed). A seller failed to collect Rs. 12,000 of tax on a sale that required collection. The penalty may be Rs. 12,000.
Sections 450 to 453: breaches of sections 185 to 188
| Section | Breach | Penalty |
|---|---|---|
| 450 | A person takes or accepts any loan, deposit or specified sum in contravention of section 185 | A penalty equal to the amount of the loan or deposit or specified sum so taken or accepted |
| 451 | A person receives a sum in contravention of section 186 | A penalty equal to the sum received in contravention |
| 452 | A person fails to provide a facility for accepting payments through the prescribed electronic modes of payment, as referred to in section 187 | A penalty of Rs. 5,000 for every day of the duration of failure |
| 453 | A person repays any loan, deposit or specified advance referred to in section 188 otherwise than in accordance with that section | A penalty equal to the loan, deposit or specified advance so repaid |
In each case it is the Assessing Officer who "may impose". The substantive rules are in sections 185 to 188; see our posts on cash loans and deposits under section 185, the cash receipt limit under section 186 and loan repayment under section 188. The "prescribed electronic modes of payment" in section 452 are left to the Income-tax Rules, 2026; the Act itself names none here.
Example (amounts assumed). Greenleaf Trading takes a loan of Rs. 5,00,000 in a way that contravenes section 185. Under section 450 the penalty may equal Rs. 5,00,000. Greenleaf also receives Rs. 3,50,000 in contravention of section 186; section 451 allows a penalty of Rs. 3,50,000. And Greenleaf has no facility for the prescribed electronic payment modes for 10 days; section 452 allows Rs. 5,000 x 10 = Rs. 50,000. The sections do not say that these penalties merge, so each is read on its own text.
How measure and trigger line up
| Section | Trigger | Measure |
|---|---|---|
| 448 | Failure to deduct, or to pay or ensure payment under named Notes | Tax not deducted or paid |
| 449 | Failure to collect | Tax not collected |
| 450 | Loan or deposit contravening section 185 | Amount of the loan, deposit or specified sum |
| 451 | Receipt contravening section 186 | Sum received |
| 452 | No prescribed electronic payment facility | Rs. 5,000 for every day |
| 453 | Repayment contravening section 188 | Amount repaid |
Related provisions and defences
For the reasonable cause defence in section 470, see our post on section 470; whether it reaches a given penalty depends on the text of that section. Penalties for statement defaults are in other sections: see sections 446, 454 and 455. For the whole Chapter see the Chapter XXI guide.
Need help with deduction and collection duties?
A penalty equal to the tax missed is a heavy price for a deduction error, and the same measure applies to cash breaches. Our TDS compliance team reviews your payment heads, rates and deposits so that the tax is deducted, collected and paid as the Act requires.
Key takeaways
- Section 448: penalty equal to the tax not deducted, or not paid or ensured to be paid under the named Notes.
- Section 449: penalty equal to the tax not collected.
- Sections 450, 451 and 453: penalty equal to the loan or deposit taken, the sum received or the loan repaid in breach of sections 185, 186 and 188.
- Section 452: Rs. 5,000 for every day of failure to offer the prescribed electronic payment modes under section 187.
- Each penalty is imposed by the Assessing Officer, who "may" do so.
- Section 470 provides a reasonable cause defence; check its text for the penalties it reaches.
Read next
- Sections 456 to 460: penalties for reporting failures by investment funds, Indian concerns and international groups
- Sections 446, 454 and 455: crypto-asset statements and statements of financial transaction
- Section 398: assessee in default for TDS
- Section 186: cash receipt limit
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.