Income Tax Penalties: Understanding Defaults and Consequences Under Indian Law
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- This article details various penalties under the Income Tax Act, 1961, for non-compliance.
- It outlines specific sections, defaults like failure to pay tax or file returns on time, and the corresponding penalties, which can range from daily fees to a percentage of undisclosed income.
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The Income Tax Act, 1961, outlines provisions for taxation in India. Non-compliance with these provisions can result in penalties and punishments.
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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Açık Sorular
- What are the exact procedures for assessing officers to impose penalties?
- Are there any appeal mechanisms against imposed penalties?
