Section 271-I: Penalty for Failure to Furnish Information or Furnishing Inaccurate Information under Section 195
Section 271-I of the Income-tax Act, 1961 provides a penalty of Rs 1,00,000 where a person required to furnish information about certain payments to non-residents fails to do so or supplies inaccurate information.
1. Meaning and scope of Section 271-I
The statutory rule is that, if a person required to furnish information under section 195(6) fails to furnish it or furnishes inaccurate information, the Assessing Officer may direct that person to pay a penalty of one lakh rupees. The section was inserted by the Finance Act, 2015 with effect from 1 June 2015.
Section 195(6) deals with prescribed information concerning payments to a non-resident (other than a company) or to a foreign company, whether or not the payment is chargeable to tax, subject to the reporting rules and exemptions. It is distinct from the withholding-tax obligation under section 195(1), which depends on taxability.
2. Penalty amount and triggering defaults
| Non-compliance | Consequence under Section 271-I |
|---|---|
| Failure to furnish information required under section 195(6) | Penalty of Rs 1,00,000, subject to applicable legal safeguards |
| Furnishing inaccurate information in required reporting | Penalty of Rs 1,00,000, subject to applicable legal safeguards |
The provision states a fixed penalty, not a percentage of the remittance. The Assessing Officer must determine whether a prescribed reporting obligation arose and whether the relevant default occurred.
3. Forms 15CA and 15CB under the 1961 Act
Under Rule 37BB of the Income-tax Rules, 1962, Form 15CA was used to provide information about applicable remittances. Form 15CB was an accountant's certificate required in specified cases; it was not mandatory for every remittance.
| Form 15CA part | Typical application under the old rules |
|---|---|
| Part A | Chargeable payments not exceeding Rs 5 lakh in aggregate during the financial year |
| Part B | Chargeable payments exceeding Rs 5 lakh where an applicable assessing-officer order or certificate has been obtained |
| Part C | Chargeable payments exceeding Rs 5 lakh where an accountant's Form 15CB certificate is obtained |
| Part D | Payments not chargeable to tax, where reporting is nevertheless required |
Rule 37BB also contained exclusions for certain payments and remittances. Accordingly, no conclusion about a penalty should be drawn without first checking whether reporting was legally required.
4. Position under the Income-tax Act, 2025
From 1 April 2026, the new reporting framework applies to covered remittances. The Income Tax Department identifies section 397(3)(d) as the corresponding reporting provision and Form 145 and Form 146 as the replacements for Forms 15CA and 15CB. The relevant procedural rules are found in Rule 220 of the Income-tax Rules, 2026.
The correct penalty provision for a transaction governed by the new Act should be checked under that Act rather than automatically applying the historical section 271-I citation.
5. Reasonable cause and procedural protection
For cases governed by the 1961 Act, section 273B provides that no penalty shall be imposable for a failure covered by section 271-I if the person proves that there was reasonable cause for that failure. The availability and application of this relief depend on the facts; inaccurate reporting and deliberate non-compliance should not be treated as automatically excused.
Before a penalty is imposed, the taxpayer should receive the statutory opportunity of being heard under section 274, where applicable. Supporting documents may include remittance instructions, taxability analysis, bank correspondence, filed forms, certificates and explanations of any genuine error.
6. Practical illustration
Suppose a business made a remittance in a period governed by the 1961 Act and was required under section 195(6) and Rule 37BB to file Form 15CA, but did not do so. The Assessing Officer could consider a penalty of Rs 1,00,000 under section 271-I. The outcome would depend on the applicable reporting requirement, facts, procedural compliance and any reasonable-cause defence.
7. Compliance checklist
- Identify the date of remittance and the applicable Income-tax Act.
- Determine the recipient's residential status and whether the payment is chargeable to Indian income tax.
- Check reporting exclusions and the prescribed information form.
- Obtain the accountant's certificate where the rules require it.
- File the relevant form before the remittance and retain acknowledgments.
- Correct discovered errors promptly and preserve a documentary audit trail.
8. Official statutory references and guidance
- Income Tax Department: Section 271-I
- Income Tax Department: Penalties and prosecutions
- Form 15CA official FAQs
- Form 15CB official FAQs
- Income Tax Department: Income-tax forms and 2026 transition guidance
Last reviewed: 28 October 2026. This article is general legal information; application to a particular remittance depends on the law and rules in force at the relevant time.