Under section 448 of the Income-tax Act, 2025, if a person fails to deduct the whole or any part of the…

Tax is deductible at source on sums paid to a contractor under section 393(1) of the Income-tax Act, 2025 (Table: Sl. No. 6(i)). Under section 448 (formerly s.271C of the Income-tax Act, 1961), if any person fails to deduct the whole or any part of the tax required under Chapter XIX-B, the Assessing Officer may impose on him a penalty equal to the tax which he failed to deduct, that is, 100% of that tax. The penalty is neither a fraction (10%) nor a multiple (200% or 300%) of that tax. Separately, such a person is also deemed to be an assessee in default under section 398(1).