Section 446 and an Inaccurate Statement

Section 446 of the Income Tax Act 2025 is the enforcement half of the reporting obligation. Where a reporting entity files its transaction statement late, or files one carrying inaccurate particulars, the section attaches a penalty to the entity.

Key highlights

Who this provision reaches, and who it does not.

Platform

The penalty falls on the reporting entity

Section 446, Act of 2025

Late

Or inaccurate particulars, either one

The trigger

Not you

Your own default sits in other provisions

See the penalty ladder

What Section 446 Penalises

Two failures, both by the entity that owes the statement. One is timing: the statement required under Section 509(1) arriving after it was due. The other is content: a statement that arrives on time but carries particulars that are wrong.

That second limb is the one with teeth for a platform, because a user level statement is a large object with many chances to be inaccurate, and correcting one after filing is a process rather than a click.

Where You Sit in This

Nowhere, directly. A penalty on a platform is not a penalty on its users, and a mistake in a platform statement is not a default by you. What it can produce is a mismatch against your return, which is a conversation you would rather not have even when you are right.

Your own exposure runs through different provisions entirely: a fee under Section 234F on a late return, a penalty under Section 271C where TDS was never deducted, prosecution under Section 276B where deducted tax was not paid in, and block assessment under Sections 158B and 113 where undisclosed holdings are found.

Frequently Asked Questions

The questions this term raises most often.

Not as an ordinary filer. The section reaches the reporting entity that owed the statement, which for crypto means the exchange or comparable platform.

The penalty exposure is the platform's. Your practical task is to spot the mismatch early by reading the AIS and Form 26AS before you file, and to keep your own records able to support the figures you return.

This page states the law and what CryptoKar computes from your trade history. It is not tax advice. Judgment calls belong with a chartered accountant. Sections and dates here were read against the source on 21 August 2026.

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