Income Tax Penalties: Understanding Defaults and Consequences Under Indian Law

If you are confused by personal finance terms, jargon and calculations, here’s a series to simplify and deconstruct these for you. In the 111th part of this series, Riju Mehta lists some of the penalties you may be liable to pay.

If you don’t comply with provisions of the Income Tax Act, 1961 (the 2025 Act will govern the next return-filing cycle), you may be punished or levied penalties. Here are some of the Sections under which defaults are considered punishable offences.

Section: 140A(3)

Default: Failure to pay wholly or partly, selfassessment tax, fringe benefit tax, or interest & fee, or both, under Section 140A(1).

Penalty: Amount imposed by assessing officer, but not exceeding tax in arrears.

Section: 158BFA(2)

Default: Determination of undisclosed income for block period.

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Penalty: 50% of the tax leviable with respect to the undisclosed income.

Section: 221(1)

Default: Failure to make tax payment.

Penalty: Amount imposed by assessing officer, but not exceeding tax in arrears.

Section: 234E

Default: Failure to file statement within the time prescribed in Section 200(3) or in proviso to Section 206C(3).

Penalty: Rs.200 for every day, but not exceeding tax deductible/collectible.

Section: 234F

Default: Not furnishing income tax return within the prescribed time under Section 139(1).

Penalty: Rs.5,000 if return is filed after due date specified under Section 139(1). If the total income does not exceed Rs.5 lakh,then Rs.1,000 late filing fee.

Section: 234G

Default: Fee for default in submitting statement/certificate prescribed under Section 35/ Section 80G.

Penalty: Rs.200 per day.

Section: 234I

Default: Filing revised income tax return.

Penalty: If revised return is filed beyond nine months, but before 12 months, from the end of relevant assessment year, Rs.1,000 fee is payable if the total income does not exceed Rs.5 lakh, and Rs.5,000 in any other case.

Section: 270A(1)

Default: Under-reporting and misreporting income.

Penalty: 50% of the tax payable on underreported income. If under-reported income is due to any misreporting, the penalty shall be equal to 200% of the amount of tax payable on the under-reported income

Section: 271A

Default: Failure to keep, maintain, or retain books of account, documents, etc., as required under Section 44AA.

Penalty: Rs.25,000

Section: 271AA1

Default: Failure to keep and maintain information and documents required by Sections 92D(1) or 92D(2).

Penalty: 2% of value of each international transaction/or specified domestic transaction entered into.

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