Section 276C – Wilful Attempt to Evade Tax, Penalty, or Interest

This section deals with criminal punishment for wilful attempts to evade tax, penalty, or interest under the Income Tax Act.

Key Provisions:

Sub-section (1):

If a person wilfully tries to evade any tax, penalty, or interest, then:

• If the amount exceeds ₹1,00,000:

  • Punishment: Minimum 6 months to 7 years rigorous imprisonment + Fine

• If the amount is ₹1,00,000 or less:

  • Punishment: Minimum 3 months to 3 years rigorous imprisonment + Fine

Sub-section (2):

If a person wilfully evades payment (not just assessment) of tax, penalty, or interest:

• Punishment: Minimum 3 months to 3 years rigorous imprisonment

• The court may also impose a fine

Explanation – What is Considered “Wilful Attempt”:

Includes situations like:

1. Possessing or controlling books/documents with false entries.

2. Making or causing false entries/statements in documents.

3. Omitting or causing omission of required entries/statements.

4. Creating any situation that helps evade tax/penalty/interest.

In Simple Terms:

If someone intentionally cheats or tries to escape from paying tax (by manipulation or concealment), they can face serious jail time and fines under this section.