Section 457
Section 457: penalty for failure to furnish information or document under Section 171
Section 457 targets a person who has entered into an international transaction or specified domestic transaction but fails to furnish the transfer pricing information or documents required under section 171(2) - the penalty is set as a percentage of the value of the transaction itself, for each such failure.
What Section 457 says
"If any person who has entered into an international transaction or specified domestic transaction fails to furnish any such information or document as required under section 171(2), a penalty equal to 2% of the value of such transaction may be imposed upon him for each such failure by the Assessing Officer or the Transfer Pricing Officer as referred to in section 166 or the Commissioner (Appeals)."
How the penalty is calculated
The penalty is 2% of the value of the relevant international transaction or specified domestic transaction, and this 2% applies for each separate failure to furnish the required information or document under section 171(2).
It can be imposed by the Assessing Officer, the Transfer Pricing Officer referred to in section 166, or the Commissioner (Appeals).
Frequently asked questions
What triggers the Section 457 penalty?
Entering into an international transaction or specified domestic transaction and then failing to furnish the information or document required for it under section 171(2).
How much is the penalty?
2% of the value of the transaction, for each such failure.
Who can impose this penalty?
The Assessing Officer, the Transfer Pricing Officer referred to in section 166, or the Commissioner (Appeals).
Related sections
Want this applied to your actual filing, not just explained?
Get help with transfer pricing documentation and assessmentLast updated 9 September 2026