Section 454
Section 454: penalty for failure to furnish statement of financial transaction or reportable account after a notice
Section 454 applies once a person required to file a statement of financial transaction or reportable account under section 508(1) has already been sent a notice under section 508(7) asking them to comply, and still fails to furnish the statement within the time given in that notice.
What Section 454 currently says
"Where any person, who is required to furnish a statement of financial transaction or reportable account under section 508(1), fails to furnish such statement or reportable account within the period specified in the notice issued under section 508(7), the income-tax authority prescribed under section 508(1) may impose on him, a penalty of ₹1,000 for every day for which such failure continues, beginning from the day immediately after the period specified in such notice for furnishing such statement or reportable account expires and such penalty shall not exceed ₹1,00,000."
How the penalty works
| Parameter | Detail |
|---|---|
| Trigger | Failure to furnish the statement/reportable account within the period specified in a notice already issued under section 508(7) |
| Rate | ₹1,000 for every day the failure continues |
| Start of the daily count | The day immediately after the notice's specified period for furnishing the statement expires |
| Maximum penalty | ₹1,00,000 |
Frequently asked questions
When does the Section 454 penalty apply?
Only after a person required to furnish a statement of financial transaction or reportable account under section 508(1) has been issued a notice under section 508(7), and still fails to furnish it within the time the notice specifies.
Is there a cap on this penalty?
Yes - the daily penalty of ₹1,000 is capped at a maximum of ₹1,00,000.
Related sections
Want this applied to your actual filing, not just explained?
Get help responding to a statement-of-financial-transaction noticeLast updated 9 September 2026