Section 450
Section 450: penalty for failure to comply with provisions of Section 185
Section 450 enforces section 185's restrictions on how loans, deposits and specified sums may be taken or accepted (typically the requirement to use banking channels rather than cash above a threshold) - a contravention triggers a penalty equal to the full amount taken or accepted in breach.
What Section 450 says
"If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 185, the Assessing Officer may impose on him, a penalty equal to the amount of the loan or deposit or specified sum so taken or accepted."
How the penalty is measured
The penalty is not a fixed figure - it equals the entire amount of the loan, deposit, or specified sum that was taken or accepted in contravention of section 185's requirements.
Frequently asked questions
What triggers a penalty under Section 450?
Taking or accepting any loan, deposit, or specified sum in a manner that contravenes section 185 of the Income-tax Act, 2025.
How much is the penalty?
A penalty equal to the full amount of the loan, deposit or specified sum taken or accepted in contravention of section 185.
Related sections
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Get help responding to a cash loan/deposit penalty noticeLast updated 9 September 2026