The Economic Times

Good news: Immunity from penalty or prosecution in income tax under-reporting cases has been expanded in these cases: Budget 2026 announcement

Section 440 of the new Income Tax Act, 2025, is being amended to extend immunity from penalties and prosecution to cases involving income misreporting. This change, effective April 1, 2026, requires taxpayers to pay an additional income-tax of 100% or 120% in lieu of penalties, aiming to reduce litigation and compliance burdens.