Amendment of section 271C.
113. In section 271C of the Income-tax Act, in sub-section (1), ––
(A) in clause (b),––
(I) for the words “pay the whole”, the words “pay or ensure payment of, the whole” shall be substituted;
(II) in sub-clause (i), the word “or” shall be omitted;
(III) after sub-clause (ii), the following sub-clauses shall be inserted, namely:––
“(iii) the first proviso to sub-section (1) of section 194R; or
(iv) the proviso to sub-section (1) of section 194S; or”;
(IV) after sub-clause (iv) as inserted by the Finance Act, 2023, the following sub-clause shall be inserted with effect from the 1st day of July, 2023, namely:––
“(v) sub-section (2) of section 194BA,”;
(B) in the long line, after the words “deduct or pay”, the words “or ensure payment of,” shall be inserted.
Notes on Clauses:
Clause 113 of the Bill seeks to amend the section 271C of the Income-tax Act relating to penalty for failure to deduct tax at source.
It is proposed to amend clause (b) of sub-section (1) of said section so as to provide that a person shall be liable to pay penalty under that section for failure to ensure payment, in addition to failure of payment, of whole or any part of tax as required under the provisions.
It is further proposed to amend the said clause to provide that a person shall be liable to pay, as penalty, a sum equal to the amount of tax which such person failed to ensure payment of.
These amendments will take effect from 1st April, 2023.
It is also proposed to amend the said clause to give reference of sub-section (2) of section 194BA.
This amendment will take effect from 1st July, 2023.
It is also proposed to amend the said clause to give reference of the first proviso to subsection (1) of section 194R and the proviso to sub-section (1) of section 194S therein.
This amendment will take effect from 1st April, 2023.
