An image decoding method according to the present document comprises the steps of: when an ISP is applied to a current block and the width or height of a sub-partition block is less than or equal to 2, applying LFNST to the transform coefficients to derive modified transform coefficients; deriving residual samples for the objective block on the basis of an inverse primary transform for the modified transform coefficients; and generating a reconstructed picture on the basis of the residual samples for the objective block, wherein when the sub-partition block is an N×2 block or a 2×N block, (M×2) or (2×M) number of modified transform coefficients are derived by applying an LFNST matrix to a predetermined number of transform coefficients in an upper left M×2 area or 2×M (M≤N) area of the sub-partition block.