Income Tax Law | Updated 28 October 2026
Section 270AA of the Income-tax Act, 1961: Immunity from Penalty and Prosecution
Section 270AA provides a mechanism for eligible taxpayers to seek immunity from penalty for under-reporting or misreporting of income and from initiation of specified prosecution proceedings, subject to payment and other statutory conditions. The provision was amended in 2026 and must be read alongside the successor law.
Meaning and scope of Section 270AA
Section 270AA is located in Chapter XXI of the Income-tax Act, 1961. It concerns immunity from penalty under section 270A and from initiation of prosecution under sections 276C (wilful attempt to evade tax) and 276CC (failure to furnish returns), subject to its terms. It does not create a blanket waiver of all penalties or prosecution offences.
Eligibility and conditions after the 2026 amendment
- Assessment or reassessment: The taxpayer has received an order under section 143(3) or section 147, as applicable.
- Payment: Tax and interest payable under the assessment or reassessment order must be paid within the period specified in the notice of demand.
- Misreporting cases: Where penalty has been levied or is leviable in circumstances covered by section 270A(9), additional income-tax equal to 100% of the tax payable on the under-reported income must be paid within the demand period, in lieu of that penalty.
- No appeal: No appeal must have been filed against the relevant assessment or reassessment order.
- Prosecution restriction: Under section 270AA(3A), relief is unavailable where proceedings have been initiated under Chapter XXII.
The expansion to misreporting cases was enacted through the Finance Act, 2026, with retrospective effect from 1 March 2026. Earlier descriptions excluding all misreporting cases are therefore outdated for the amended provision.
Application, deadline and decision
| Requirement | Position under Section 270AA |
|---|---|
| Application form | Form No. 68 under Rule 129 of the Income-tax Rules, 1962 |
| Application deadline | Within one month from the end of the month in which the relevant order is received, as provided by section 270AA(2) |
| Decision by Assessing Officer | Within three months from the end of the month in which the application is received (extended from one month with effect from 1 April 2025) |
| Rejection | The taxpayer must be given an opportunity of being heard before rejection |
| Finality | The order accepting or rejecting the application is final under section 270AA(5) |
Under section 270AA(3), the Assessing Officer considers the statutory conditions after expiry of the relevant appeal-filing period. The amended provision also permits waiver of penalty in qualifying misreporting cases.
Example of time calculation
If the relevant assessment order is received on 12 June, the one-month period measured from the end of June ordinarily ends on 31 July. Check the applicable statutory text, electronic filing requirements and any legally valid extension before filing.
Effect on appeal and revision rights
Where the Assessing Officer accepts the immunity application, section 270AA(6) bars an appeal under section 246 or section 246A, or a revision application under section 264, against the assessment or reassessment order covered by the accepted application. Taxpayers should evaluate the merits of any proposed appeal before opting for immunity.
Corresponding provision under the Income-tax Act, 2025
Section 440 of the Income-tax Act, 2025 deals with waiver of penalty and immunity from prosecution. Its associated provisions include section 439 (penalty for under-reporting and misreporting) and sections 478 and 479 (specified prosecution offences). The prescribed application is Form 161 under Rule 231 of the Income-tax Rules, 2026, instead of Form 68 for the earlier law. The applicable tax year, assessment order and transitional rules determine which law and form must be used.
Section-by-section explanation
Sub-section (1): Who can apply
Sets out the eligible assessment or reassessment, timely tax and interest payment, additional tax for specified misreporting cases and absence of an appeal.
Sub-section (2): Time and prescribed form
Requires a verified application within one month from the end of the month of receipt of the relevant order, using the prescribed form.
Sub-section (3): Grant of immunity or waiver
Directs the Assessing Officer to grant qualifying relief after the appeal period expires and the statutory conditions are met.
Sub-section (3A): Exclusion
Precludes immunity or waiver where proceedings have been initiated under Chapter XXII.
Sub-section (4): Order and hearing
Requires an order within three months from the end of the month of receipt of the application, and an opportunity of hearing before rejection.
Sub-sections (5) and (6): Finality and remedies
Make the decision final and restrict appeal or revision against the underlying assessment where the application is accepted.
Official legislation and forms
- Income Tax Department: Section 270AA, 2026 amended text
- Finance Bill 2026 explanatory memorandum
- CBDT Notification No. 90/2016: Rule 129 and Form 68
- Official Form 68 (PDF)
- Income Tax Department: Form 161 FAQs under the 2025 Act
- Budget 2026 official FAQs on expanded immunity
Legal information only. The applicable provision depends on the relevant tax year, assessment order, effective dates and saving provisions. Review the official text and case-specific facts before applying.