Section 508 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 508 of the Income-tax Act, 2025 requires a long list of persons, from assessees to Registrars, stock exchanges and depositories, to furnish a statement of specified financial transactions or reportable accounts that they register or record. It also sets out how defects in the statement are handled, how a missing statement is called for, and the duty to correct an inaccuracy within ten days. To see what has been reported about you, an AIS and TIS reconciliation is the usual starting point.
This explanation is as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. Under section 1(3) the Act came into force on the 1st April, 2026, save as otherwise provided. Later amendments, rules and notifications should be checked.
A person in any of the twelve categories in section 508(1) who is responsible for registering or maintaining records of a specified financial transaction or reportable account must furnish a statement to the prescribed authority. A defect not rectified within thirty days is treated as inaccurate information. A missing statement can be called for by notice with up to thirty days to comply, and any inaccuracy found later must be reported within ten days.
Section 508(1): who must furnish the statement
Any person, being one of the following, who is responsible for registering, or maintaining books of account or other documents containing a record of, any specified financial transaction or any reportable account, as may be prescribed, under any law in force, shall furnish a statement regarding that transaction or account to the income-tax authority or other authority or agency as may be prescribed. The statement covers what is registered, recorded or maintained by the person and information relating to which is relevant and required for the Act.
| Clause | Person |
|---|---|
| (a) | An assessee |
| (b) | The prescribed person, in the case of an office of Government |
| (c) | A local authority or other public body or association |
| (d) | The Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908 (16 of 1908) |
| (e) | The registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988 (59 of 1988) |
| (f) | The Director General as referred to in section 2(a) of the Post Office Act, 2023 (43 of 2023) |
| (g) | The Collector referred to in section 3(g) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013) |
| (h) | The recognised stock exchange referred to in section 2(f) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) |
| (i) | An officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) |
| (j) | A depository referred to in section 2(1)(e) of the Depositories Act, 1996 (22 of 1996) |
| (k) | A prescribed reporting financial institution |
| (l) | Any other person, as may be prescribed |
The Acts named in clauses (d) to (j) are other laws, quoted as printed; check them for their own definitions. Which persons are prescribed under clauses (b), (k) and (l) is left to the Income-tax Rules, 2026 and is not in the text consulted.
Section 508(2) to (4): period, transactions and values
- Sub-section (2). The statement is furnished for such period, within such time and in such form and manner as may be prescribed.
- Sub-section (3). "Specified financial transaction" means any transaction, as may be prescribed, of: (a) purchase, sale or exchange of goods or property or right or interest in a property; (b) rendering any service; (c) a works contract; (d) an investment made or expenditure incurred; or (e) taking or accepting any loan or deposit.
- Sub-section (4). The Board may prescribe different values for different transactions in sub-section (3) for different persons, having regard to the nature of the transaction.
The Act therefore names the five kinds of transaction, but whether a particular transaction must be reported, and above what value, depends on what is prescribed. The text prints no monetary limit here.
Section 508(5) and (6): defects
If the prescribed income-tax authority finds a defect in the statement, he may intimate the defect to the person furnishing it, to rectify within thirty days of the intimation. He may, at his discretion, extend that period on an application made for the purpose.
If the defect remains unrectified within the initial thirty days or the extended period, the provisions of the Act apply as if the person had furnished inaccurate information in the statement, irrespective of anything in any other provision of the Act. This is the consequence; the section does not itself state a penalty, and the penalty provisions of the Act should be read for it.
Section 508(7): statement not furnished
If a person required to furnish the statement fails to do so within the specified time, the prescribed income-tax authority may serve a notice requiring him to furnish it within a period not exceeding thirty days from service of the notice, and he shall furnish the statement within the time specified in the notice.
Section 508(8): reporting an inaccuracy
If a person who has furnished a statement under sub-section (1), or in pursuance of a notice under sub-section (7), becomes aware of any inaccuracy in the information provided, he shall within ten days inform the prescribed income-tax authority, or the other authority or agency referred to in sub-section (1), of the inaccuracy and furnish the correct information in the prescribed manner.
Section 508(9): rules the Central Government may make
The Central Government may specify by rules: (a) the persons referred to in sub-section (1) to be registered with the prescribed income-tax authority; (b) the nature of information and the manner in which it shall be maintained by those persons; and (c) the due diligence to be carried out by those persons for identifying any reportable account.
| Stage | Time limit in section 508 |
|---|---|
| Rectifying a defect after intimation | Thirty days from the date of intimation, extendable at discretion on application |
| Complying with a notice for a missing statement | Not exceeding thirty days from service of the notice |
| Informing of an inaccuracy discovered later | Within ten days |
A worked example (names assumed)
Greenfield Securities Depository Limited is a depository referred to in section 508(1)(j). It furnishes its statement for the relevant period. (The name and facts are assumed.)
- The prescribed income-tax authority finds a defect and intimates it on 1 June. The depository must rectify within thirty days, that is by 1 July, unless the period is extended on its application.
- It rectifies on 25 June, so the consequence in sub-section (6) does not arise.
- On 10 August it discovers that one account was reported with an incorrect detail. Under sub-section (8) it must inform the authority and furnish the correct information within ten days, that is by 20 August, in the manner prescribed.
- Had it not rectified the defect within the thirty days, the Act would apply as if it had furnished inaccurate information.
Need help understanding what has been reported about you?
Statements under this section feed the information that the department holds about a taxpayer. If you see a transaction you do not recognise, or want to reconcile what has been reported with your books, our AIS and TIS reconciliation team can assist.
Key takeaways
- Section 508(1) lists twelve categories of persons, from assessees to depositories, reporting institutions and others as prescribed.
- A "specified financial transaction" is one of five kinds listed in sub-section (3), as prescribed; values may be set differently under sub-section (4).
- A defect must be rectified within thirty days of intimation, extendable on application; otherwise the person is treated as having furnished inaccurate information.
- A notice for a missing statement allows a period not exceeding thirty days.
- An inaccuracy discovered later must be reported within ten days.
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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.