Chapter XXII - Offences and Prosecution
Section 490
Section 490: presumption as to culpable mental state
Section 490 is a general rule that applies across every prosecution brought under the Income-tax Act, 2025. Where an offence requires a "culpable mental state" - broadly, that the accused acted knowingly or intentionally - the court starts by presuming that mental state existed. It is then up to the accused to prove they did not have it.
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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) In any prosecution for any offence under this Act, which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the Act charged as an offence in that prosecution.
(2) For the purposes of this section, the expression “culpable mental state” includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact.
(3) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.
Introduction
For an offence requiring a culpable mental state, section 490 directs the court to presume that state, while permitting the accused to prove its absence. The section defines the relevant mental states and a demanding proof standard.
Key takeaways
Presumption
The court presumes a required culpable mental state in an Act prosecution.
Defence
The accused may prove the absence of that state for the charged act.
Meaning and proof
Intention, motive, knowledge and belief are included; subsection (3) uses beyond-reasonable-doubt proof wording.
What Section 490 says
"In any prosecution for any offence under this Act, which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the Act charged as an offence in that prosecution."
So the presumption works against the accused by default - the court assumes the necessary mental state was present - but the accused can rebut it by proving they did not have that state of mind.
What "culpable mental state" means
The section gives this term a wide meaning: it "includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact."
The standard of proof
Section 490(3) sets a high bar for what counts as "proved" for these purposes: "a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability."
This means the ordinary civil-law standard (more likely than not) is not enough - the fact must be established to the criminal standard of beyond reasonable doubt.
Step-by-step flow for applying Section 490
- 1
Does the offence charged require a culpable mental state?
Culpable mental state includes intention, motive, knowledge of a fact, belief in a fact, and reason to believe a fact (Section 490(2)). Examples are "wilfully" in Sections 478 to 481 and "knows or believes" in Section 482.
- No: Section 490 does not apply.
- Yes: Go to the next step.
- 2
The court presumes the mental state
Under Section 490(1), the prosecution does not first have to prove the mental state.
- 3
What may the accused prove in defence?
It is a defence for the accused to prove that he had no such mental state with respect to the act charged in that prosecution (Section 490(1)). The burden on this point is on the accused.
- 4
Is the absence of the mental state proved beyond reasonable doubt?
Under Section 490(3), a fact is proved only when the court believes it to exist beyond reasonable doubt, not merely when it is established by a preponderance of probability.
- Yes: The defence succeeds on the mental-state element.
- No: The presumption of a culpable mental state stands.
Practical checklist
Do
- Identify the mental-state element of the particular charged offence before applying this presumption.
- Preserve contemporaneous records that may establish lack of intention, knowledge or belief in relation to the charged act.
Avoid
- Do not treat the presumption as eliminating the express defence in sub-section (1).
- Do not apply a civil balance-of-probabilities standard to the proof addressed by sub-section (3).
Illustrative example
Worked example: a return said to be delayed by illness
Hypothetical facts (illustration only, not a real taxpayer): Ms. Pillai is prosecuted under Section 479 for wilfully failing to furnish her return in due time. She says she was hospitalised for the whole period and did not know the return was pending.
Mental state needed
Section 479 requires a wilful failure, which is a culpable mental state.
Presumption
Under Section 490(1), the court presumes the failure was wilful.
Burden
She must prove she had no such mental state. Her own statement alone may not be enough; hospital records covering the full period would support her.
Standard
Under Section 490(3), the court must believe her account beyond reasonable doubt; showing it is only more likely than not is not enough.
Outcome
- The outcome turns on whether her evidence meets the beyond-reasonable-doubt standard in Section 490(3).
- Section 490 does not create an offence; it shifts the burden on the mental-state element.
Glossary
- Culpable mental state
- For this section, intention, motive, knowledge, belief or reason to believe a fact.
Frequently asked questions
Does the tax department have to prove I intended to commit the offence?
No. Under Section 490, once a prosecution is brought for an offence requiring a culpable mental state, the court presumes that mental state existed. The burden shifts to the accused to prove they did not have it.
What does "culpable mental state" cover?
As defined in Section 490(2), it includes intention, motive, knowledge of a fact, or belief in, or reason to believe, a fact.
What standard of proof applies to facts under this section?
Section 490(3) requires the court to believe the fact exists beyond reasonable doubt - a mere preponderance of probability is not sufficient.
Need help applying this provision to your situation?
Talk to our tax team about a prosecution noticeLast updated 9 October 2026