Penalties Under DPDP: Fines, Breach Scenarios, and How to Reduce

The Digital Personal Data Protection(DPDP) rules in India are here, and every enterprise finds itself at a crossroads, wondering what will go wrong if they do not comply with the DPDP rules. Well, long story short, the DPDP penalty comes to ₹50 Crore to ₹250 Crore. The cost of a DPDP breach is high, and with stakes as high as this, ignorance is definitely not bliss.

In this article, we will discuss the various DPDP penalties and the factors that will lead to the same. The DPDP rules come with a daunting compliance challenge that requires a list of operational changes across vendors and systems. We have already covered the DPDP compliance checklist to get a fair understanding of what the rules require enterprises to adhere to before we move into a detailed discussion of fines under the DPDP rules.

Also Read: Top 5 Consent Management Platforms in India 2025

What are the DPDP Penalties?

The DPDP Act cites 6 different categories of violations that will attract DPDP fines of a certain amount. The highest bracket of DPDP fines is applicable for non-compliance of the rules on the grounds of children’s data processing, data security, and breach notification. Fines will be levied even on the small breaches of other consent obligations, and that can go up to ₹50 Crore per instance.

[Infographic of the table below]

DPDP Breach	DPDP Fines (In INR Up to)
Failure of not take reasonable security measures to protect from data breaches	250 crore
Failure for not provide a notice upon a personal data breach	200 crore
Breach related to obligations concerning children	200 crore
Breach of obligation concerning data Fiduciaries	150 crore
Breach related to consent obligations	50 crore
Breach concerning other provisions	50 crore

Here’s a list of DPDP breaches for which the enterprises will have to pay ₹50 Crore:

1. Not collecting explicit, specific, and free consent of the user for their personal data.

2. No display of compliant notices at every touchpoint.

3. No maintenance of verifiable data records for every user consent.

4. Sharing the data of the user without their consent

5. Storage of data foran indefinite time, even after consent withdrawal

6. Not letting users exercise DPDP rights over their personal data

You can also read a quick summary of the DPDP rules, where we discussed in details every aspect the rule touches upon.

Who will adjudicate violations of DPDP rules?

A special board called the Data Protection Board (DPB) has been establish to ensure a smooth enforcement of the DPDP Act. This board has been given the task to ensure compliance, handle disputes and also address the grievances concerning the data protection practises. The DPB is operating via a digital office, which implies that starting from lodging complains to final decision making, all the acts will be handled digitally. The DPB has all the rights and authority to impose sanctions, investigate and adjudicate every case related to DPDP compliance.

The DPB will exercise their measures upon receiving complaints pertaining to DPDP breach. However, before the user files a complaint to the board , they must seek grievance redressal from the consent manager or the data fiduciary.

How will DPB impose DPDP Fines?

Once the data fiduciary’s redressal mechanism is exhausted, users will be allowed to file complaints with the DPB online:

1. The DPB will first assess the legitimacy of the complaint.

2. A detailed investigation shall be conducted by DPB once the complaint is admitted.

3. The DPB will ensure that the daily operations of the business under investigation is not affected.

4. The DPB has powers equal to the civil court. This includes examining evidence, summoning individuals and also issuing orders.

5. The DPB can then issue directions and impose DPDP penalties once the parties have had their fair hearing.

The constitution of DPB is yet to happen and the exact procedure of the same will be notified later. However the power bestowed on it has been clearly established in the DPDP Act.

Also Read: The DPDP Compliance Checklist (2025): Step-by-Step Guide for Indian Businesses

Factors that will lead to fines under the DPDP Act

The DPB has a wide range of discretion on the scope of sanctions it can impose based on several relevant factors:

1. Data Sensitivity: A significant role will be played by the type of personal data compromised. The breaches that involve sensitive personal data would get more priority. One such example can be a breach at a healthcare provider’s systems because of a lack of sufficient safeguards, leading to the revealing of patients’ medical records. Given the nature of this data is highly sensitive, this breach would lead to a higher penalty. Similarly, breaches related to children’s data can lead to higher DPDP fines.

2. Breach Characteristics: This describes the relevance of the duration, gravity , and nature of the violation. For example, a company has been using personal data for telemarketing without the consent of its users for five years. This type of consent violation could lead to substantial penalties under DPDP laws, especially when a large amount of data is involved.

3. Financial Gains: In case a data fiduciary benefits from the data breach, penalties may be levied to offset these gains to ensure that non-compliance with the laws doesn’t become a profitable business. For example, in the case of tech companies sourcing user data in bulk without user consent and reselling it further, the fines will be calculated basis the revenue generated from the sales.

4. Proportionality: While penalties need to be proportionate to the breach, the goal is to ensure no violations in the future. The penalty might be higher in case the board wants to set an example for other businesses by levying a heavy fine on one business. In case the business demonstrates transparency and swift action, the penalty might even be lowered. However, in the case of a business with a history of violating the laws, a punitive fine may be charged to set a precedent.

5. Mitigation Efforts: These refer to the actions taken by the enterprises to mitigate the harm caused due to the breach. Prompt responses can reflect favourably during the assessment of the DPDP penalty. If the entity quickly informs the affected customers and offers free monitoring services, this in turn strengthens the security measures. Actions like these are encouraged and may result in a reduction of the DPDP fines.

6. Business Impact: Another factor that will be taken into account is the potential impact on the organisation’s operations and viability. For example, a community-based non-profit organisation ends up losing consent records due to outdated software. The limited resources of the organisation will be taken into account by the regulators while drafting the penalty, such that the business does not end up suffering.

How to Avoid DPDP Penalties?

Execution of DPDP rules is no joke. The immense magnitude and scale of these changes are enough to make your head spin. However, the first step towards compliance is understanding the impact of the law on your business and then drawing a detailed roadmap for the same. The majority of the DPDP challenges come down to managing user consent and generating the notice in multiple languages such that every user is on page. However, Privy by IDfy, India’s first full-stack privacy and governance platform, is exactly solving this problem.

If you also wish to be DPDP compliant in no time and do not wish a 250crore fine imposed on your business, get in touch with us at shivani@idfy.com so that we can help you become DPDP compliant in no time. Also, keep a lookout at this space for more articles on DPDP, privacy, and compliance.