The Central Board of Direct Taxes (CBDT) has revised Income Tax Form 161, introducing changes to the process through which taxpayers can seek a waiver of penalties under the Income-tax Act, 2025. The revised form requires detailed disclosures about assessment orders, under-reported income, outstanding tax liabilities and payments made by applicants.
The changes were notified on October 8, 2026, through the Income-tax (Sixth Amendment) Rules, 2026. The amendment updates Rule 231 and replaces the earlier Form 161 with a revised format for applications filed under Section 440(2) of the Income-tax Act, 2025. (CBDT) has introduced the changes to align the application process with the revised provisions governing penalty waivers.
How much additional tax must taxpayers pay?
Under the revised Form 161, eligible taxpayers seeking a penalty waiver must pay additional income tax at rates of 100% or 120% of the tax payable on the relevant under-reported income, depending on the category of misreporting.
Taxpayers whose cases fall under Section 439(11)(a) to (f) must pay additional income tax equivalent to 100% of the applicable tax amount. In cases covered under Section 439(11)(g), the additional tax is 120%.
The total amount payable includes the tax and interest on the assessed income, along with the additional income tax required under the waiver provisions. Applicants must ensure that the required payments are made within the deadline specified in the notice of demand.
What details must taxpayers provide in Form 161?
The revised form is divided into two sections. Part A collects basic personal information, including the taxpayer’s name, Permanent Account Number (PAN), address, mobile number and email address.
Part B requires details of the assessment or reassessment order, including the relevant tax year, the section under which the order was passed, the Document Identification Number (DIN), the order date, the date of service and the payment deadline mentioned in the notice of demand.
Taxpayers must also disclose their assessed income, under-reported income, tax and interest liabilities, and the additional income tax payable in place of the penalty.
The form further requires payment details, including the bank’s BSR code, date of deposit, challan serial number and amount paid. Multiple payment entries can be provided wherever necessary.
Digital filing and verification requirements
The revised form includes changes intended to streamline the application process. It allows the use of a Digital Postal Index Number (DIGIPIN) in address details and provides for pre-filled information wherever applicable, potentially reducing manual data entry.
Applicants must verify that the information submitted is accurate and comply with the applicable statutory conditions. The form also requires declarations concerning appeals against the assessment order.
What does the revised Form 161 mean for taxpayers?
The revision expands the penalty-waiver application framework to cover eligible cases involving misreporting of income, subject to the conditions prescribed under the law. Previously, the earlier immunity framework under the Income-tax Act, 1961, was limited to under-reporting cases and did not provide the same route for misreporting cases.
Taxpayers considering this option should carefully assess the additional tax liability, settle the required dues and ensure that their application meets the applicable conditions and deadlines. The revised framework offers a route to seek penalty relief and immunity from prosecution in eligible cases, but approval is subject to the statutory requirements.
The changes are part of the implementation of the Income-tax Act, 2025, and aim to bring the application process in line with the updated legal provisions.