CBDT Notifies New Form 161 for Penalty Waiver under Section 440(2)

What changes

• Rule 231: after the word "imposition", the words "or waiver" are inserted.
• Form 161: the existing form is replaced by a new Form 161, titled "Application for seeking waiver of penalty under section 440(2) of the Income-tax Act, 2025".

Who it applies to

Any person who wants to apply for waiver of penalty under section 440(2) after an assessment or reassessment order. This includes companies, LLPs and their directors, partners and finance teams. The form is signed by the person making the application or by someone competent to file and verify it on their behalf.

From when

• Notification issued: 8 October 2026.
• In force: on the date of publication in the Official Gazette.

Context and background

The Income-tax Rules, 2026 were published on 20 March 2026 under the Income-tax Act, 2025. They were last amended on 22 September 2026. This Sixth Amendment aligns Rule 231 and Form 161 with the waiver provision in section 440. Check the consolidated rules for the earlier wording of Form 161.

Effect in practice

Rule 231 now refers to waiver as well as imposition, and the substituted Form 161 is the form for a waiver application. Applicants should use the new form from the date the notification is published.

What the new form asks for

• Part A: name, PAN, address and contact details. Names must be given in full, without abbreviations. The address may include the DIGIPIN. Some details are pre-filled where possible.
• Part B: the tax year, the section under which the order was passed, the DIN, date and date of service of the order, and the due date for payment under the notice of demand.
• Under-reported income: split between income arising from misreporting under section 439(11)(a) to (f), income under section 439(11)(g), and income not arising from misreporting.
• Amount payable: tax and interest on the assessed income, plus additional income-tax in lieu of penalty. The additional tax is 100% of the tax on the first category of under-reported income (misreporting under section 439(11)(a) to (f)) and 120% of the tax on the second (section 439(11)(g)). The total is the amount payable for waiver under section 440(1).
• Payment details: BSR code, date of deposit, challan serial number and amount.
• Verification: the applicant declares that no appeal has been filed against the order and undertakes not to file one before the expiry of the period in section 440(5).

Note 3 to the form says the total amount payable for waiver is the amount payable within the due date for payment in the notice of demand (Sl. No. 10).