Section 453
Section 453: penalty for failure to comply with provisions of Section 188
Section 453 is the repayment-side counterpart to section 450's penalty on taking loans/deposits in cash - it penalises repaying a loan, deposit or specified advance otherwise than in accordance with section 188 (typically the requirement to repay through banking channels), with a penalty equal to the amount repaid in breach.
What Section 453 says
"If a person repays any loan or deposit or specified advance referred to in section 188 otherwise than in accordance with the provisions of that section, the Assessing Officer may impose on him, a penalty equal to the loan or deposit or specified advance so repaid."
How the penalty is measured
The penalty equals the full amount of the loan, deposit or specified advance that was repaid in a manner that did not comply with section 188.
Frequently asked questions
What does Section 453 penalise?
Repaying a loan, deposit or specified advance (as referred to in section 188) otherwise than in accordance with the requirements of that section.
How much is the penalty?
A penalty equal to the entire loan, deposit or specified advance amount that was repaid non-compliantly.
Related sections
Want this applied to your actual filing, not just explained?
Get help responding to a Section 188 penalty noticeLast updated 9 September 2026