Use the amended provision, not an old penalty chart
Income-tax Act, 2025 section 427(3), as substituted by Finance Act, 2026 provides a fee of ₹200 for every day of failure to furnish the required section 508(1) statement of financial transaction or reportable account within the section 508(2) time, capped at ₹1,00,000. The substitution is effective from 1 April 2026. This article, checked on 25 October 2026, explains that enacted framework; it does not retrospectively apply it to every older reporting default.
Identify the correct reporting obligation first
Obtain the statement type, reporting period, legal reporting-person category and actual applicable due date, including any valid extension. A taxpayer viewing an item in AIS is not necessarily the person obliged to file the reporting statement. Nor does every financial receipt create an SFT filing obligation. This working starts only after the section 508 obligation and the law governing the default are established.
Section 427(1)–(2) separately concerns the specified TDS/TCS statement and its tax-deductible-or-collectible cap. Do not import that cap into subsection (3). The SFT/reportable-account fee has its own ₹1 lakh ceiling. Do not multiply the fee by the number of bank transactions or reportable accounts merely because the statement contains multiple entries.
Count failure days and stop the arithmetic at the fee cap
Keep due date, actual valid furnishing date and the resulting failure-day count as separate fields. In the examples, delay runs from the day after the assumed due date through the actual furnishing date; the supplied due dates are fictional established inputs, not a filing calendar. A rejected upload needs investigation rather than being automatically treated as valid furnishing. Fee = the lesser of ₹200 multiplied by established failure days and ₹1,00,000.
Five hundred failure days reach the cap arithmetically. Reaching it does not terminate the filing obligation, validate inaccurate data or grant immunity from other applicable consequences. The examples assume a single relevant default and a validly established day count. They do not decide transitional defaults crossing enactment, contested service or extension questions.
Separate ordinary lateness from a failure after notice
The amended section 454 separately permits a penalty for failure to furnish within the period specified in a section 508(7) notice, at ₹1,000 for each continuing day after that notice period, capped at ₹1,00,000. It uses a different trigger and is an authority-imposed penalty. Section 455 addresses inaccurate information and due diligence separately. Do not replace the ordinary fee with a notice penalty, assume every late case has a notice, or announce automatic waiver from filing alone.
Prepare an event timeline and separate schedules for fee, any notice-stage exposure, payment and actual submission evidence. Preserve the applicable law version and acknowledgements. This guide’s numerical illustrations calculate only section 427(3), except where another component is expressly excluded.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: One day late
Assume the valid deadline is 30 June 2026 and valid furnishing occurs on 1 July. Failure days = 1. Fee = 1 × ₹200 = ₹200.
Illustrative example 2: A calendar span across month-end
Assumed deadline 30 June 2026; valid furnishing 15 July. Failure days = 15, giving ₹3,000. No monthly rounding is applied to this daily fee.
Illustrative example 3: Longer delay below the cap
For 125 established failure days, ₹200 × 125 = ₹25,000. The full amount is below the ₹1,00,000 cap.
Illustrative example 4: At the ceiling
For 500 failure days governed by this provision, the arithmetic fee is ₹1,00,000, equal to the cap. This is a duration model, not a claim that 500 post-commencement days have elapsed by the check date.
Illustrative example 5: Beyond the ceiling
For 620 established days, arithmetic is ₹1,24,000, but the section 427(3) fee is capped at ₹1,00,000. The ₹24,000 excess is not added under this fee provision.
Illustrative example 6: Entries do not become daily multipliers
One delayed statement containing 80 reportable entries has 20 established failure days. Fee = ₹4,000, not ₹3,20,000 from multiplying ₹4,000 by 80. Separate legal defaults, if any, need their own analysis.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the reporting person | Actual section 508 obligation analysis. |
| 2 | Identify the statement and period | Reporting category and period record. |
| 3 | Select the applicable law version | Commencement and transitional-default assessment. |
| 4 | Verify the due date | Current prescribed time and valid extensions. |
| 5 | Establish valid furnishing | Acknowledgement, validation and rejection history. |
| 6 | Compute failure days | Dated daily interval working. |
| 7 | Apply subsection (3)’s cap | ₹200 daily calculation and ₹1 lakh ceiling. |
| 8 | Check any notice separately | Section 508(7) notice and expiry record. |
| 9 | Separate other consequences | Sections 454/455 and other applicable requirements. |
| 10 | Reconcile payment and completion | Payment evidence and valid final submission record. |
Sixteen practitioner FAQs
1. Is this the old section 271FA chart?
No. This article addresses the amended 2025 Act framework effective from 1 April 2026.
2. Does the new daily fee itself identify all SFT filers?
No. Establish section 508 reporting applicability separately.
3. Is an AIS recipient always the reporting person?
No. Identify who has the actual statement obligation.
4. Does subsection (3) cover a reportable-account statement?
Its text includes the required statement of financial transaction or reportable account.
5. Is its cap linked to tax deducted?
Do not import subsection (2)’s TDS/TCS cap into the distinct subsection (3) fee.
6. What daily amount applies here?
₹200 per established failure day, subject to the statutory cap.
7. What is the cap?
₹1,00,000 under section 427(3).
8. How many days reach the cap arithmetically?
500 days at ₹200 per day.
9. Does the cap end the reporting duty?
No. Complete the valid statement and assess other applicable consequences.
10. Is the fee multiplied by every transaction row?
Do not invent a per-row multiplier from this provision.
11. Does uploading a rejected file prove furnishing?
Retain and examine the validation outcome and applicable filing requirements.
12. Can every default use the same annual due date?
No. Verify the actual statement, period, rules and extensions.
13. Does section 454 have the same trigger?
No. Its amended provision concerns failure after the specified notice period.
14. Is that penalty automatically included in these examples?
No. The examples calculate only the stated fee.
15. Does timely payment excuse inaccurate information?
No. Accuracy and due-diligence obligations require separate review.
16. What record best supports the amount?
The applicable law, established due date, valid furnishing evidence and a transparent day-and-cap calculation.
Conclusion
The Finance Act, 2026 introduced section 427(3)’s daily fee for delayed section 508 statements. Reconcile the applicable due date and failure days, apply the ₹1 lakh cap, and assess notice-stage penalties separately.