Section 446

Section 446: penalty for crypto-asset transaction reporting failures

Section 446 backs up the crypto-asset reporting obligation under section 509 with two separate penalties - a daily penalty for simply not filing the required statement on time, and a flat penalty for filing it with inaccurate information or without proper due diligence.

This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.

Penalty for not furnishing the statement on time

Sub-section (1): if a person required to furnish a statement of a crypto-asset transaction under section 509(1) fails to furnish it within the prescribed time, the prescribed income-tax authority under that section may impose a penalty of ₹200 for every day the failure continues.

Penalty for inaccurate information or lack of due diligence

Sub-section (2): the prescribed income-tax authority may impose a penalty of ₹50,000 on the same person if they either (a) provide inaccurate information in the statement and fail to remove the inaccuracy as required under section 509(4), or (b) fail to comply with the due diligence requirement under section 509(5).

Frequently asked questions

What is the penalty for late filing of a crypto-asset transaction statement?

₹200 for every day the failure to furnish the statement under section 509(1) continues, under section 446(1).

What if the statement is filed but the information is wrong?

A penalty of ₹50,000 applies under section 446(2), if inaccurate information is provided and not corrected as required by section 509(4), or if the due diligence requirement under section 509(5) is not met.