PENALTIES UNDER INOME TAX ACT, 1961
As the number of tax payers is increasing, some lapses on the part of the assessee can be expected. Under the Income-tax Act, 1961 there are various provisions for compliance with taxing provisions and the collection of taxes.
The Income-tax Act seeks to enforce tax compliance in a threefold manner; namely :-
- Imposition of interests.
- Imposition of penalties and,
- Prosecutions
Default in complying with provisions of or with conditions prescribed under the Income-tax Act would attract certain penalty and in critical cases prosecutions as well. The document will provide you information about the punishable offences, prosecutions and the quantum of penalties that can be imposed under the law.
| Section | Description | Penalty Imposed |
| 140A(3) | Default in payment of self-assessment tax, interest and fees or both | Amount decided by the respective assessing officer restricted to arrears in taxes |
| 158BFA(2) | Undisclosed income for the specified block period | From 100% of the undisclosed amount to 300% of the undisclosed amount depending on the severity according to the respective assessing officer. |
| 221(1) | Default in payment of tax | Amount decided by the respective assessing officer restricted to arrears in taxes |
| 234E | Default in filing statement under section 200(3)- TDS return or 206C(3) -TCS return | Rs 200 per day until the statement is filed maximum up to tax amount deducted or collected |
| 234F | Failure in furnishing return within the deadline | Rs 5000 (If a return filed after the due date of 31st July but before 31st Dec of the relevant assessment year)
Rs 10,000 (If filed after 31st Dec ) Rs 1000 (For income less than Rs 5 lakhs) |
| 270A(1) | Under-reporting or Mis-reporting of income | 50% of the tax payable on the under-reported income
200% of the tax payable on the under-reported income due to mis-reporting |
| 271(1)(b) | Non-compliance to notice under section 115WD(2),115WE(2), 142(1), 143(2), 142(2A) | Rs 10,000 per failure before A.Y. 2017-18
Not applicable from A.Y. 2017-18 |
| 271(1)(c) | Concealment of income or fringe benefits or inaccurate mention of the same | 100% to 300% of the tax before A.Y. 2017-18
Not applicable from A.Y. 2017-18 |
| 271(4) | Profit sharing with entities other than partners of the firm | Up to 150 per cent of the difference between the tax on partner’s income assessed and tax on income returned.
Not applicable from A.Y. 2017-18 |
| 271A | Non-maintenance of books or accounts (As per section 44AA) | Rs 25000 |
| 271AA(1) | Non-maintenance or misreporting of information or documents of transaction mentioned in per section 92D(1) 92D(2) | 2% of each international transaction/or specified domestic transaction |
| 271AA(2) | Non-disclosure of information or document mentioned in Section 92D(4) | Rs 5,00,000 |
| 271AAA | Undisclosed income before 1st July 2012 | 10% of the undisclosed amount |
| 271AAB(1) | Undisclosed income from 1st July 2012 to 15th December 2016 | 10% of the undisclosed amount if the assessee admits the undisclosed income, substantiates the manner in which it was earned, files the return disclosing such income and pays tax with interest before the due date specified
20% of the undisclosed amount if the assessee does not admits the undisclosed income and files the return declaring such income and pays tax with interest before the due date specified 60% of the undisclosed amount if neither of the above two cases. |
| 271AAB(1A) | Undisclosed income after 15thDecember 2016 | 30% of the undisclosed amount if the assessee admits the undisclosed income, substantiates the manner in which it was earned, files the return disclosing such income and pays tax with interest before the due date specified
60% of the undisclosed amount if other than above |
| 271AAC | Income under section 68, 69, 69A, 69B, 69C, 69D not disclosed by assessee or tax related to it is not paid | 10% of tax payable under section 115BBE. |
| 271B | If the accounts are not audited, or report of the audit is not submitted as per section 44AB | Rs 1,50,000 or 0.5% of the total turnover/gross receipts whichever is least |
| 271BA | If the report from an accountant is not submitted as per section 92E (transfer pricing audit report) | Rs 1,00,000 |
| 271BB | Non-disclosure of submission of units described under section 88A(1) | 20% of such amount |
| 271C | Non-deduction of Tax fully or partially as mentioned under section 192 to 196D of chapter XVIIB
or failure to pay wholly or partly tax u/s 115-O(2) or second proviso to section 194B |
An amount equivalent to the tax not deducted or paid |
| 271CA | Non-collection of Tax as mentioned under Chapter XVII-BB | An amount equivalent to the tax not collected |
| 271D | Acceptance of any amount against the laws mentioned in section 269SS | An amount equal to loan or deposit or specified sum so taken or accepted |
| 271DA | Acceptance of Rs. 2,00,000 or more in one single day section 269ST | 100% of such amount |
| 271E | Repayment of any loan otherwise than in a manner mentioned in Section 269T | 100% of such amount |
| 271F | Non-filing of return as mentioned in section 139(1) provisions before respective assessment year | Rs 5000 before A.Y. 2017-18
Not applicable from A.Y. 2017-18 |
| 271FA | Non-issuance of Annual Information Return as mentioned in section 285BA(1) | Rs 500/day during which default continues |
| Non-issuance of Annual Information Return as mentioned in section 285BA(5) | Rs 1000/day during which default continues | |
| 271FAB | Non-submission of the statement of activities conducted in India by foreign investment fund within 90 days after the end of the respective financial year | Rs 5,00,000 |
| 271FB | If failure to file a return of fringe benefits as required under section 115WD(1) | Rs 100/day during which default continues |
| 271G | Non-disclosure of information or document for transaction mentioned in Section 92D(3) | 2% of each transaction |
| 271GA | Non- submission of the report of income earned by an Indian in case of
§ Stake in a foreign company which earns profit from assets in India § The Foreign company owning assets in India |
2% of the transaction if it is concerned with the Indian or Rs 5000 |
| 271GB(1) | Non-submission of report mentioned in section 286(2) | Rs 5000/day: up to 30 days
Rs 15000/day: after 30 days until submission |
| 271GB(2) | Non-submission of report or document mentioned in section 271GB(6) | Rs 5000/day until submission |
| 271GB(3) | Non-submission of report mentioned in section 286 despite penalties in 271GB(1) and 271GB(2) | Rs 50,000/day until submission |
| 271GB(4) | No mention of in-accuracy in the report mentioned in section 286(2) or Submission of the inaccurate report mentioned in section 286(2) | Rs 5,00,000 |
| 271H | Non-submission or Inaccurate submission of statement mentioned in section 200(3) or 206C(3) | Between Rs 10,000 to Rs 1,00,000 as decided by the respective assessing officer w.e.f 1st October 2014 |
| 271I | Non-disclosure of payment made to NRI or foreign entity in the form 15CA, 15CB | Rs 1,00,000 |
| 271J | Inaccurate details in any report or document or certificate by an accountant, investment banker | Rs 10,000/ inaccurate report or certificate |
| 272A(1) | Non-compliance in:
Answering questions Signing statement or documents Providing books of accounts for summons under section 131(1) Notices under section 142(1), 143(2), 142(2A) |
Rs 10,000/ each non-compliance |
| 272A(2) | Failure in:
§ Providing details under section 94(6) related to securities § The issue of notice of termination of business or profession under section 176(3) § Submit returns, statements, certificates and acceptance of inspection as mentioned in section 133, 134, 139(4A), 139(4C), 192(2C), 197A, 203, 206, 206C, 206C(1A), 285B § Deduct and pay tax under section 226(2) § Filing a copy of statement mentioned in section 200(3) and 206C(3) before 1st July 2012 § Filing a copy of statement mentioned in section 206A(1) § Submission of a statement mentioned in section 200(2A) and 206C(3A) mandatory from 1st June 2015 |
Rs 10,000/ failure
(In case of failures related to section 197A, 203, 206, 206C, 200(2A), section 200(3), 206C(3), 206C(3A), penalty limited to the TCS/TDS amount) |
| 272AA(1) | Non-compliance with section 133B | Maximum up to Rs 1000 |
| 272B | Non-compliance with section 139A, 139A(5)(c), 1395A, 1395C | Rs 10,000 |
| 272BB(1) | Non-compliance with section 203A | Rs 10,000/ non-compliance |
| 272BB(1A) | Incorrect TAN in certificates, statements, challans, documents mentioned in section 203A(2) | Rs 10,000 |
By
Maitri Badani
(Article Assistant)
