Penalties under Income Tax Act
PENALTIES & PROSECUTION [AY 2019-20]
| Section | Nature of default | Penalty leviable |
| (1) | (2) | (3) |
| 140A(3) | Failure to pay wholly or partly— | Such amount as Assessing Officer may impose but not exceeding tax in arrears |
(a) self-assessment tax/fringe benefit tax, or |
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(b) interest, or |
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(c) both |
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| under section 140A(1) | ||
| 158BFA(2) | Determination of undisclosed income of block period | Minimum : 100 per cent of tax leviable in respect of undisclosed income |
| Maximum : 300 per cent of tax leviable in respect of undisclosed income. | ||
| 221(1) | Default in making payment of tax | Such amount as Assessing Officer may impose but not exceeding amount of tax in arrears |
| 234E | Failure to file statement within time prescribed in section 200(3) or in proviso to section 206C(3) | Rs. 200 for every day during which failure continues but not exceeding tax deductible/collectible |
| 270A(1) | Under-reporting and misreporting of income | A sum equal to 50% of the amount of tax payable on under-reported income. However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under-reported income |
| 271(1)(b) | Failure to comply with a notice under section 115WD(2)/115WE(2)/142(1) or section 143(2) or failure to comply with a direction under section 142(2A) | Fixed at Rs. 10,000 for each failure. Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. |
| 271(1)(c) | Concealment of particulars of income or fringe benefits or furnishing of inaccurate particulars of income or fringe benefits | Minimum : 100 per cent |
| Maximum : 300 per cent of tax sought to be evaded in addition to tax payable | ||
| Note: | ||
| 'Amount of tax sought to be evaded' shall be aggregate of tax sought to be evaded under the general provisions and the tax sought to be evaded under the provisions of MAT or AMT. However, if an amount of concealed income is considered both under the general provisions and provisions of MAT or AMT, such amount shall not be considered in computing tax sought to be evaded under provisions of MAT or AMT. Further, where provisions of MAT or AMT are not applicable, the computation of tax sought to be evaded under the provisions of MAT or AMT shall be ignored. | ||
| Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | ||
| 271(4) | Distribution of profits by registered firm otherwise than in accordance with partnership deed and as a result of which partner has returned income below the real income | Not exceeding 150 per cent of difference between tax on partner's income assessed and tax on income returned, in addition to tax payable |
| Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | ||
| 271A | Failure to keep, maintain, or retain books of account, documents, etc., as required under section 44AA | Rs. 25,000 |
| 271AA(1) | (1) Failure to keep and maintain information and documents required by section 92D(1) or 92D(2) |
2% of value of each international transaction/or specified domestic transaction entered into |
(2) Failure to report such transaction |
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(3) Maintaining or furnishing incorrect information or document |
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| 271AA(2) | Failure to furnish information and document as required under Section 92D(4) | Rs. 5,00,000/- |
| 271AAA | Where search has been initiated before 1-7-2012 and undisclosed income found | 10% of undisclosed income |
| 271AAB | Where search has been initiated on or after 1-7-2012 and undisclosed income found | (a) 10% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income |
| (b) 20% of undisclosed income of the specified previous year if assessee does not admit the undisclosed income, and on or before the specified date declare such income in the return of income furnished for the specified previous year and pays the tax, together with interest thereon; | ||
| (c) 60% of undisclosed income of the specified previous year if it is not covered by (a) or (b) above | ||
| 271B | Failure to get accounts audited or furnish a report of audit as required under section 44AB | One-half per cent of total sales, turnover or gross receipts, etc., or Rs. 1,50,000, which-ever is less |
| 271BA | Failure to furnish a report from an accountant as required by section 92E | Rs. 1,00,000 |
| 271BB | Failure to subscribe any amount to units issued under scheme referred to in section 88A(1) | 20 per cent of such amount |
| 271C | Failure to deduct tax at source, wholly or partly, under sections 192 to 196D (Chapter XVII-B) or failure to pay wholly or partly tax u/s 115-O(2) or second proviso to section 194B | Amount equal to tax not deducted or paid |
| 271CA | Failure to collect tax at source as required under Chapter XVII-BB | Amount equal to tax not collected |
| 271D |
Taking or accepting any loan or deposit or specified sum in contravention of the provisions of Section 269SS. "Specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. |
Amount equal to loan or deposit or specified sum so taken or accepted |
| 271E |
Repayment of any loan or deposit or specified advance otherwise than in accordance with provision of Section 269T. "Specified advance" means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not transfer takes place. |
Amount equal to loan or deposit or specified advance so repaid |
| 271F | Failure to furnish return as required by section 139(1) or by its provisos before the end of the relevant assessment year | Rs. 5,000 |
| 271FA1 | Failure to furnish an annual information return as required under section 285BA(1)2 | Rs. 100 per day of default |
| Failure to furnish annual information return within the period specified in notice u/s 285BA(5) | Rs. 500 per day of default | |
Section 9A provides that fund management activity carried out by an eligible offshore investment fund through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India (subject to certain conditions). The provision requires that eligible investment fund shall furnish within 90 days from the end of the financial year a statement, in respect of its activities in a financial year, in the prescribed form containing information relating to fulfilment of specified conditions and such other information or documents as may be prescribed. Penalty to be levied if investment fund failed to comply with the requirement. |
Rs. 5,00,000 |
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| 271FB | Failure by an employer to furnish the return of fringe benefits as required under section 115WD(1) | Rs. 100 for every day of default |
| 271G3 | Failure to furnish any information or document as required by section 92D(3) | 2% of the value of the international transaction/specified domestic transaction for each failure |
Section 285A provides for reporting by an Indian concern if following two conditions are satisfied: a) Shares or interest in a foreign company or entity derive substantial value, directly or indirectly, from assets located in India; and b) Such foreign company or entity holds such assets in India through or in such Indian concern. In this case, the Indian entity shall furnish the prescribed information for the purpose of determination of any income accruing or arising in India under Section 9(1)(i). In case of any failure, the Indian concern shall be liable to pay penalty. |
Penalty shall be: a) a sum equal to 2% of value of transaction in respect of which such failure has taken place, if such transaction had effect of, directly or indirectly, transferring right of management or control in relation to the Indian concern; b) a sum of Rs. 5,000 in any other case. |
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| 271GB(1) | Failure to furnish report under section 286(2) | Rs. 5,000 per day upto 30 days and Rs. 15,000 per day beyond 30 days |
| 271GB(2) | Failure to produce the information and documents within the period allowed under section 271GB(6) | Rs. 5,000 for every day during which the failure continues. |
| 271GB(3) | Failure to furnish report or failure to produce information/documents under section 286 even after serving order under section 271GB(1) or 271GB(2) | Rs. 50,000 for every day for which such failure continues beginning from the date of serving such order. |
| 271GB(4) | Failure to inform about inaccuracy in report furnish under section 286(2) Or furnishing of inaccurate information or document in response to notice issued under section 286(6). |
Rs. 5,00,000 |
| 271H4 | Failure to deliver/cause to be delivered a statement within the time prescribed in section 200(3) or the proviso to section 206C(3), or furnishes incorrect information in the statement | W.e.f. 1-10-2014 Assessing Officer may direct payment of penalty. Penalty shall not be less than Rs. 10,000 but may extend to Rs. 1,00,000 |
As per section 195(6) of the Act, any person responsible for paying to a non-resident or to a foreign company, any sum (whether or not chargeable to tax), shall furnish the information relating to such payment in Form 15CA and 15CB. Penalty shall be levied in case of any failure. |
Rs. 1,00,000 |
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| 272A(1) | Refusal or failure to : | Rs. 10,000 for each failure/default |
(a) answer questions |
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(b) sign statement |
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(c) attend to give evidence or produce books of account, etc., in compliance with summons under section 131(1) |
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(d) comply with notice u/s 142(1), 143(2) or failure to comply with direction issued u/s 142(2A). |
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| 272A(2) | Failure to : | |
(a) furnish requisite information in respect of securities as required under section 94(6) ; |
Rs. 10,000 for each failure/default. (In respect of penalty for failure, in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns u/ss 206 and 206C and statements under Section 200(2A) or section 200(3) or proviso to section 206C(3) or section 206C(3A), penalty shall not exceed amount of tax deductible or collectible) | |
(b) give notice of discontinuance of business or profession as required under section 176(3) ; |
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(c) furnish in due time returns, statements or certificates, deliver de-claration, allow inspection, etc., under sections 133, 134, 139(4A), 139(4C), 192(2C), 197A, 203, 206, 206C, 206C(1A) and 285B; |
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(d) deduct and pay tax under section 226(2) |
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(e) file a copy of the prescribed statement within the time specified in section 200(3) or the proviso to section 206C(3) (up to 1-7-2012) |
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(f) file the prescribed statement within the time specified in section 206A(1) |
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(g) Failure to deliver or cause to be delivered a statement under Section 200(2A) or Section 206C(3A) within prescribed time. With effect from June 1, 2015, it is mandatory for an office of the Government, paying TDS or TCS, as the case may be, without production of a challan, to deliver a statement in the prescribed form and manner to the prescribed authority. |
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| 272AA(1) | Failure to comply with section 133B | Not exceeding Rs. 1,000 |
| 272B | Failure to comply with provisions of section 139A/139A(5)(c)/(5A)/(5C) | Rs. 10,000 |
| 272BB(1) | Failure to comply with section 203A | Rs. 10,000 for each failure/default |
| 272BB(1A) | Quoting false tax deduction account number/tax collection account number/tax deduction and collection account number in challans/certificates/statements/documents referred to in section 203A(2) | Rs. 10,000 |