Income Tax Bill 2025: Legal Consequences And Penalties

A crispier and simpler income tax bill consisting of 622 pages with 536 sections is more likely to be tabled in the Parliament on Thursday during the ongoing budget session. The new bill was cleared by the Cabinet on Friday. After the introduction of the bill to the Lok Sabha, after which it will be referred as the parliamentary committee, the bill will be sent back to the cabinet and the government will decide whether the amendments to be included or more to be added.

Here are the details regarding what happens when one fails to furnish the returns of income, to produce accounts and documents or gives false statement in verification etc.

Read also: How New Income Tax Bill Proposes The Collection And Recovery Of Tax

The Bill proposes that if a person fails to pay taxes and the amount of tax that would have been evaded exceeds 25 lakhs, they will be subjected to rigorous imprisonment for a period of at least six months. And this time period can also be extended to seven years. In addition to the imprisonment, a liable fine will also be introduced on them.

If the person willfully fails to pay the tax amount in due time, he will be punished with imprisonment for a term which is less than three months and can be exceeded to three years. The person will be liable to fine as well.

In the case of failing to produce documents and accounts as referred to the notice served on him or willfully fails to comply with the direction issued on him, the person will be punished with rigorous imprisonment for a term which may extend to one year and shall also be liable to fine.

False statement in verification: If the person lies or submits false information in tax-related documents; evasion of more than Rs 25 lakh in taxes, the person will be imprisoned for at least 6 months to 7 years.

If the evaded amount is less than Rs 25 lakh, the person will be at least imprisoned for 3 months to 2 years in jail including fine.

Falsification of books of accounts or any other details: This provision deals with someone else evading the tax by making false entries or statements in financial records.

Read also: What Are the Refund Rules Proposed By New Income Tax Bill?

If intentionally a person helps to evade someone taxes by falsifying records, he/she will be jailed for 3 months to 2 years and fine, even the other person has not evaded the tax.