PENALTIES UNDER INOME TAX ACT, 1961

PENALTIES UNDER INOME TAX ACT, 1961

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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 :-

  1. Imposition of interests.
  2. Imposition of penalties and,
  3. 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)

 

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