The Union Budget for the financial year 2026–27 signals a tougher stance on income-tax compliance, particularly for delays in audits, filings, and statutory
statements. Presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1, the proposals aim to discourage procrastination by sharply increasing fees for missed deadlines under the Income-tax framework.
Budget 2026 imposes a steep charge for taxpayers who fail to submit tax audit reports on time. The Finance Bill also introduces revised fee structures for delayed return filings and non-submission of mandated financial statements, reflecting the Government’s intent to enforce timely compliance.
Steep Fine For Delayed Tax Audit Reports
One of the most striking measures in the Budget relates to tax audit delays. The proposed provision imposes a significant financial burden on taxpayers who do not complete and submit their audit reports within the prescribed timeline.
“...If a person fails to get his accounts audited for any tax year or years and furnish the report of such audit as required under section 63, he shall be liable to pay by way of fee,–– (i) a sum of Rs 75,000 for a delay up to one month for which such failure continues; and (ii) a sum of Rs 1,50,000 thereafter," the Budget states.
In effect, a delay of up to one month attracts a fee of Rs 75,000, while any delay extending beyond that period triggers a much higher charge of Rs 1.5 lakh. The provision is designed to ensure that audit obligations are treated as non-negotiable.
Revised Fees For Late Income-Tax Returns
The Finance Bill also revisits penalties for filing income-tax returns after the due date. As outlined in section 428, individuals who are required to file a return under section 263 but miss the deadline will face a graded fee structure based on income levels.
Taxpayers with total income not exceeding Rs 5 lakh will have to pay Rs 1,000, while those earning above that threshold will be charged Rs 5,000. The same fee regime applies if a return is filed under section 263(5) after nine months from the end of the relevant assessment year.
Daily Charges For Missing Statements And Reports
Beyond returns and audits, the Budget sharpens penalties for delays in submitting various statutory statements. Section 427 proposes a daily fee of Rs 200 for failure to furnish statements required under section 397(3)(b). However, this amount is capped and cannot exceed the total tax that was supposed to be deducted or collected. Importantly, the fee must be cleared before the statement is finally submitted.
Similarly, under section 508, delays in furnishing statements of financial transactions or reports of reportable accounts will attract a fee of Rs 200 per day. This penalty is subject to an upper limit of Rs 1 lakh, ensuring proportionality while still acting as a deterrent.
