Revised Form 161 Under the Income-tax Act, 2025: Who Can Apply for Penalty Waiver and How

Form 161 is an application to the Assessing Officer seeking waiver of a penalty levied under Section 439 and immunity from initiation of specified prosecution proceedings under Section 478 or 479 of the Income-tax Act, 2025.

CBDT revised Form 161 in October 2026. The application is optional, and approval is not automatic. You must meet the statutory conditions and provide the required information.

Who Can Apply?

An assessee may apply after receiving an assessment order under Section 270(10) or a reassessment order under Section 279, where a penalty under Section 439 has been levied. The applicant must generally:

• Pay the tax and interest due under the order within the time stated in the notice of demand.
• Pay any additional income tax required in lieu of penalty within that time.
• Not have filed an appeal against the assessment or reassessment order or the penalty levy.
• Undertake not to appeal before the end of the period specified in Section 440(5).

Applying does not cancel the tax or interest demand. The no-appeal condition is significant: consider the appeal consequences before choosing this route.

Form 161 Deadline and Decision Timeline

File Form 161 within one month from the end of the month in which you receive the assessment or reassessment order. This is not simply one month from the date you receive it.

The Assessing Officer must generally accept or reject the application within three months from the end of the month in which it is received. The application cannot be rejected without giving you an opportunity to be heard.

Additional Tax in Lieu of Penalty

Additional income tax is payable only in the specified misreporting categories under Section 439(11). The applicable amount is:

• 100% of the tax payable on the under-reported income for categories under Section 439(11)(a) to (f).
• 120% for the category under Section 439(11)(g).

These rates do not apply to every Form 161 application. Check the category in the order and the amounts shown in the form before paying.

Information to Prepare

The revised form asks for details such as:

• PAN, address and contact information.
• Tax year and assessment or reassessment order details, including the section, DIN and dates.
• The notice-of-demand payment deadline.
• Assessed income, under-reported income and the applicable category.
• Tax, interest and any additional income tax payable in lieu of penalty.
• Payment details, including BSR code, challan number, date and amount.

Keep the order, demand notice, payment challans and supporting computation together. Check the current portal instructions for the information required in your case.

How to Submit Form 161

Form 161 must be submitted online through the Income Tax e-Filing portal.

1. Review the order and demand notice. Confirm that you meet the statutory conditions.
2. Pay the amounts due within the demand-notice deadline and retain the challan details.
3. Sign in to the portal and open the income-tax forms section.
4. Complete and submit Form 161 with accurate order and payment details.
5. Save the acknowledgement and track the application under e-File → Income Tax Forms → View Filed Forms.

Submission is not approval. If the application is accepted, the order is final under this process. Acceptance also makes an appeal or revision against the assessment or reassessment order inadmissible in the circumstances set out in Section 440(8). Consider that consequence before applying.

For help reviewing an assessment order or demand, TaxClear’s income tax notice support team can assist.

Frequently Asked Questions

Does Form 161 automatically waive the penalty?

No. The Assessing Officer considers the application and determines whether the statutory conditions are met.

Does filing Form 161 cancel the tax demand?

No. You must pay the tax and interest stated in the demand notice and any applicable additional income tax in lieu of penalty.

Is the deadline one month from the date I receive the order?

Generally, the deadline is one month from the end of the month in which you receive the order.

Can I appeal after applying?

The application requires that no appeal has been filed and includes an undertaking not to appeal within the specified period. If the application is accepted, appeal and revision rights may also be affected.

How can I check the application status?

Go to e-File → Income Tax Forms → View Filed Forms on the e-Filing portal and keep the acknowledgement for your records.