Chapter XIX - Collection and Recovery of Tax
Section 429
Section 429: fee for default relating to statement or certificate
Section 429 is a daily late fee aimed at institutions rather than individual taxpayers - research associations, universities, colleges, companies and charitable institutions/funds that fail to deliver a prescribed statement or certificate connected with donations or contributions they have received.
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Need advice on Section 429?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Without prejudice to the provisions of this Act, where,— (a) the research association, University, college or other institution referred to in section 45(3)(a) or the company referred to in section 45(3)(b) fails to deliver or cause to be delivered the documents as may be prescribed in section 45(4)(a) within the time as may be prescribed therein or furnish a certificate as may be prescribed under section 45(4)(a); or (b) the institution or fund fails to deliver or cause to be delivered a statement under section 354(1)(e), within the time as may be prescribed under that section, or furnish a certificate as may be prescribed under section 354(1)(g), it shall be liable to pay, by way of fee, a sum of ₹200 for every day during which the failure continues.
(2) The amount of fee referred to in sub-section (1) shall,— (a) not exceed the amount in respect of which the failure referred to therein has occurred; (b) be paid before delivering or causing to be delivered the statement or before furnishing the certificate referred to in sub-section (1).
Introduction
Section 429 imposes a ₹200 daily fee for specified institutions or funds that delay the prescribed donation-related statement or certificate under section 45 or section 354. The fee has a transaction-amount ceiling and must be paid before later delivery.
Key takeaways
Named entities and duties
Subsection (1) identifies the section 45 research or institution route and the section 354 institution or fund route.
Daily amount
The fee is ₹200 for every day the default continues.
Ceiling and payment
It cannot exceed the amount to which the failure relates and must be paid before delivering the statement or certificate.
Research and educational-body route
The first limb applies to a research association, university, college or other institution under section 45(3)(a), or a company under section 45(3)(b), that fails to deliver the prescribed section 45(4)(a) documents in time or furnish the prescribed certificate. Identify the entity and its particular prescribed duty.
Institution or fund route
The second limb concerns an institution or fund that fails to deliver its section 354(1)(e) statement on time or furnish its section 354(1)(g) certificate. The section 45 and section 354 obligations should not be conflated.
Daily fee, ceiling and payment timing
The fee is ₹200 for every day the failure continues, capped at the amount in respect of which the failure occurred. The fee is to be paid before delivering the statement or furnishing the certificate. Record the due date, delivery date and related amount.
Step-by-step flow for applying the fee under Section 429
- 1
Is the person one of the entities named in Section 429(1)?
Clause (a): a research association, University, college or other institution referred to in section 45(3)(a), or a company referred to in section 45(3)(b). Clause (b): an institution or fund required to deliver a statement under section 354(1)(e) or a certificate under section 354(1)(g).
- No: Section 429 does not apply.
- Yes: Go to the next step.
- 2
Has it failed to deliver the documents or statement within the prescribed time, or failed to furnish the certificate?
The documents, certificate and time limit are those prescribed under section 45(4)(a) or section 354; Section 429 does not state them.
- No failure: No fee arises.
- Failure: Go to the next step.
- 3
Count the days of continuing failure
The fee is ₹200 for every day during which the failure continues (Section 429(1)).
- 4
Apply the cap
Under Section 429(2)(a), the fee cannot exceed the amount in respect of which the failure has occurred. Take the lower of the day-based fee and that amount.
- 5
Pay before compliance
Under Section 429(2)(b), the fee must be paid before delivering the statement or furnishing the certificate.
Practical checklist
Do
- Identify the relevant section 45 or 354 obligation and its prescribed due date.
- Keep statement and certificate delivery acknowledgements and calculate the fee against the related amount.
Avoid
- Do not apply this fee to an institution that is not within the named statutory duty.
Illustrative example
Worked example: a late donation statement by a charitable institution
Hypothetical facts (illustration only, not a real taxpayer): A charitable institution required to deliver a statement under section 354(1)(e) delivers it 40 days after the prescribed time. The assumed amount in respect of which the failure has occurred is ₹5,00,000. A second, smaller institution is 40 days late on a statement where the assumed amount involved is ₹6,000.
Day-based fee
40 days × ₹200 = ₹8,000 under Section 429(1).
Cap - first institution
₹8,000 does not exceed ₹5,00,000, so the fee stays at ₹8,000.
Cap - second institution
₹8,000 exceeds the ₹6,000 involved, so under Section 429(2)(a) the fee is limited to ₹6,000.
Timing of payment
Each institution must pay its fee before delivering the statement (Section 429(2)(b)).
Outcome
- Fee payable: ₹8,000 for the first institution and ₹6,000 for the second.
- The prescribed time and form of the statement come from the rules under section 354, not from Section 429.
Frequently asked questions
Who is liable to pay the fee under Section 429?
A research association, university, college or other institution under Section 45(3)(a), a company under Section 45(3)(b), or an institution or fund under Section 354(1) that fails to deliver a prescribed statement, document or certificate on time.
What is the fee amount under Section 429?
₹200 for every day the failure continues, capped at the amount in respect of which the failure occurred.
Can the Section 429 fee be more than the amount involved in the failure?
No. Section 429(2)(a) provides that the fee shall not exceed the amount in respect of which the failure has occurred.
Need help applying this provision to your situation?
Get help with a Section 429 statement or certificate defaultLast updated 9 October 2026