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Penalty Under Income Tax Act

Updated on: Jun 12th, 2024

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32 min read

An assessee who commits an offence under the provisions of The Income Tax Act, 1961 shall be subject to penalty. The penalty is an additional amount levied and is different from the tax payable. The penalty is levied based on the law at the time of the offence being committed and not as it stands in the financial year for which the assessment is being made. The list of penalties for assessment year 2024-25 are:

Sl No

Section No. and Description

Penalty

1)

Section 158BFA- Determination of undisclosed income for the block period, when a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person

  • Minimum - 100% of the tax payable on undisclosed income 
  • Maximum - 300% of the tax payable in respect of the undisclosed income

    This penalty will be levied only on that portion of the income which was determined by the ITO in excess of the ITR furnished by the assessee u/s 158BC and an appeal is not filed against such assessment

2)

Section 221(1)- Default in making payment of taxes

Amount as directed by the assessing officer. However, the amount of penalty cannot exceed the amount of tax in arrears.

3)

Section 234E- Failure to file return in respect of TDS/TCS within the time prescribed  as given under section 200(3)/206C(3)

Rs.200 for every day until you file the return 
The penalty cannot be more than the TDS/TCS amount.

4)

Section 234F- Default in furnishing of return under section 139(1) within the time prescribed

Rs.5,000 if return is furnished before 31st December of the assessment year.

Note: If the income does not exceed  Rs.5 Lakhs then the penalty shall not exceed Rs.1,000

5)

Section 270A- 

- Penalty for under-reporting of income   
- Penalty for under-reporting on account of misreporting of income


- 50% of the amount of tax payable on under-reported income. 
- In case of misreporting, 200% of the amount of tax payable on under-reported income

6)

Section 271A- Failure to keep, maintain or retain the books of account, documents as required under Section 44AA

Rs. 25,000

7)

Section 271AA(1)- Penalty in respect of an international transaction/specified domestic transaction with regard to: 

-failure to keep and maintain any such information and document as required by Section 92D(1) or 92D(2)
-failure to report such transaction which is required to be done 
-Maintaining or furnishing incorrect information or document

2% of the value of each international transaction or specified domestic transaction entered into.

8)

Section 271AA(2)- Failure to furnish information and document to the authority prescribed as required under Section 92D(4)

Rs.5,00,000

9)

Section 271AAA- Where search has been initiated under Section 132 between 1st day of June, 2007 and 1st day of July, 2012

10% of the undisclosed income of the specified previous year

10)

Section 271AAB(1)- Where search was initiated after 1-7-2012 but before 15-12-2016 and undisclosed income was found

a) 10% of the undisclosed income if: Assessee admits the undisclosed income along with the manner of deriving the same. 
-Substantiates the manner in which undisclosed income was derived
-Pays the tax along with interest and furnishes the return of income for the specified previous year declaring undisclosed income on or before the specified date  

b) 20% of the undisclosed income if: The assessee does not admit the undisclosed income 
-Declares the income for the specified previous year and pays the tax along with interest on the undisclosed income on or before the specified date   

c) 60% of the undisclosed income: If not covered under clause (a) or (b) above

11)

Section 271AAB(1A)- Where search was initiated after 15-12-2016 and undisclosed income was found

a) 30% of the undisclosed income if: -Assessee admits the undisclosed income along with the manner of deriving the same. 
- Substantiates the manner in which undisclosed income was derived 
- Pays the tax along with interest and furnishes the return of income for the specified previous year declaring undisclosed income on or before the specified date  

b) 60% of the undisclosed income if it is not covered under the provisions of clause (a)

12)

Section 271AAC- Income under sections 68,69,69A,69B,69C,69D determined by the assessing officer if not included by assessee or tax under Section 115BBE not paid  

*Section 68- Cash Credits 
Section 69- Unexplained Investments 
Section 69A- Unexplained money Section 
69B-Amount of investments not fully disclosed in books of account Section 
69C-Unexplained expenditure 

At the rate of 10% on tax payable under Section 115BBE

13)

Section 271AAD- Penalty for false entry, fake invoices etc. in books of account

If any assessing officer finds- 
a) A false entry, or
b) An omission of any entry which is relevant for the computation of the total income of an assessee. 

He may direct the assessee to pay a penalty of an amount equal to the sum of such false or omitted entries. 

The false entry here means the following: 
a) Forged or false documents such as a fake invoice 
b) Any invoice of supply or receipts of goods or services issued by any person without actual supply or receipt of goods or services 
c) An invoice in respect of the supply or receipt of goods or services or both to or from a person who does not exist

14)

Section 271B- Failure to get the accounts audited or furnish the  report as required under Section 44AB

In the case of business: One-half per of the total sales, turnover/gross receipts. 
or 
Rs.1,50,000, whichever is less

15)

Section 271BA- Failure to furnish a report from an accountant to be furnished by persons entering into an international transaction or specified domestic transaction under Section 92E

Rs. 1,00,000

16)

Section 271BB- Failure to subscribe to the eligible issue of capital referred to in Section 88A(1)

20% of such amount

17)

Section 271C- Failure to deduct tax at source

A sum equal to the amount of tax not paid or failed to deduct

18)

Section 271CA- Failure to collect tax at source

A sum equal to the amount of tax not collected

19)

Section 271D- Accepting loan or deposit or specified sum in contravention of Section 269SS

A sum equal to the loan or deposit or specified sum taken

20)

Section 271DA- Receiving any sum( Rs. 2 Lakhs or more) in contravention to the provisions of Section 269ST 

A sum equal to the amount of receipt

21)

Section 271DB-Penalty for failure to comply with the provision of section 269SU with regard to providing a facility for accepting payment through the prescribed electronic modes of payment

a sum of Rs 5,000, for every day during which such failure continues

22)

Section 271E- Failure to comply with the provisions of Section 269T with regard to the repayment of loan/deposit/specific advance

Sum equal to the amount of loan/deposit/specific advance repaid.

23)

Section 271F- Failure to furnish the returns as required under Section 139(1) or by its proviso before the end of the relevant assessment year Note: Applicable up to AY 2017-18

Rs.5,000

24)

Section 271FA- Failure to furnish a statement of financial transaction or reportable account under Section 285BA(1)  

 

 Failure to furnish the statement within the period specified in the notice issued under Section 285BA(5)

Rs.500 for every day during which the failure continues

 

 

Rs.1,000 for every day during which the failure continues

25)

Section 271FAA- Furnishing inaccurate statement of financial transaction or reportable account.

Rs.50,000

26)

Section 271FAB- Failure to furnish statement/information/document by an eligible investment fund within the time prescribed as provided under Section 9A(5)

Rs.5,00,000

27)

Section 271FB- Failure to furnish a return of fringe benefits as required under Section 115WD(1) within the prescribed time

Rs.100 for every day during which the failure continues

28)

Section 271G- Failure to furnish information under Section 92D(3) in relation to an international transaction or specified domestic transactions

2% of the value of the international transaction or specified domestic transaction for each such failure.

29)

Section 271GA- Failure by the Indian concern to furnish any information or document under Section 285A  

Section 285A- 
- Where any interest/share in an entity registered outside India obtains its value from assets located in India and 
- Where such foreign company holds assets in the Indian concern  Such an Indian concern shall, for the purposes of determination of any income accruing or arising in India, furnish the documents within the prescribed time 






- 2% of the value of the transaction in respect of which such failure has taken place if such transaction had the effect of directly or indirectly transferring the right of management/control in relation to the Indian concern.

- Rs. 5,00,000 in any other case

30) 

Section 271GB- 


Failure to furnish the report/submitting an inaccurate report by the reporting entity which is required to furnish a country-by-country report as required under Section 286.   


 

 

 

- Failure to produce the documents within 30 days of notice as prescribed under Section 286(6).

 

- Furnishing inaccurate information in the report which is to be furnished under Section 286(2).

- For delay of:
a) less than one month: Rs.5,000 for every day of default
b) more than one month: Rs.15,000 for every day of default
c) Continuing default even after service of notice under either (a) or (b) above penalty would be Rs.50,000 for every day of default.

- Rs.5,000 for every day of default starting after the period for furnishing the document expires.   


 

- Rs.5,00,000

31) 

Section 271H- Failure to furnish TDS/TCS statements  of furnishing incorrect information within the prescribed time   

Note: Applicable to TDS/TCS statements to be delivered after 01-07-2012 

Minimum:  Rs.10,000 
Maximum: Rs.1,00,000

32)

Section 271I- Failure in furnishing the information related to the payment made  to a non-resident, which is not a company/foreign company of any sum (even though not chargeable under the provisions of  this act) 

Rs.1,00,000

33)

Section 271J- Incorrect information in reports/certificates by an accountant/merchant banker/registered valuer

Rs. 10,000 for each such report/certificate

34)

Section 271K-Penalty for failure to furnish statements under section 35(1) ,80G(5)

Minimum:  Rs.10,000 
Maximum: Rs.1,00,000

35)

Section 272A(1)- Any person fails/refuses to: 
- Answer questions put by the IT authority 
- Sign statements which the IT authority requires him to do  
-Give evidence or produce the books under summons issued under Section 131(1) 
-Comply with the notice issued under Section 142(1) or 143(2) or 142(2A)

Rs. 10,000 for each default

36)

Section 272A(2)- Failure to: 
- Furnish the statement regarding ownership/beneficial interest in the securities in order to determine whether tax is borne on the same as required under Section 94(6) 

- Furnish the notice of discontinuance within 15 days under section 176(3) 

- Furnish information, TDS return, TCS returns and submission of statements by producers of cinematograph films under section 133/206/206C/285B

- To allow inspection/copies of the register under Section 134 

-To furnish return of income under Section 139(4A) or 139(4C) 

-To deliver a copy of the declaration for transactions where no TDS needs to be deducted as given under Section 197A 

-To furnish a certificate for TDS/TCS under section 203/206C 

-To deduct and pay tax in respect of salary as referred to in Section 226

-To furnish a statement to the person receiving the salary complete particulars of perquisites or profits in lieu of salary under section 192(2C) 

-To deliver in due time a copy of declaration as required under Section 206C(1A) -To deliver statements pertaining to TDS/TCS under section 200(3) or 206C(3) 

-To furnish quarterly returns in respect of payment of interest to residents without deduction of tax within the prescribed time and in a prescribed manner under section 206A(1) 

-To furnish a statement in respect of sums credited to the Central Government under Section 200(2A) or Section  206C(3A).

Rs 500 for every day during which the failure continues
In sections related to TDS/TCS, the amount of penalty shall not exceed the amount of tax-deductible/collectible.

37)

Section 272AA- Failure to comply with Section 133B wherein an income tax authority has the power to call for information

Maximum: Rs. 1,000

38)

Section 272B- 

Failure to comply with Section 139A with regard to a permanent account number(PAN) or Aadhar number

 

-PAN is to be quoted in the documents as prescribed by the Board under Section 139(5)(c) 
-PAN is to be furnished to the person deducting tax by the person receiving the income PAN is to be furnished to the person responsible for collecting tax by the buyer/licensee/lessee. 

If in any of the circumstances the PAN furnished is false or the person believes it to be false then he shall be liable to a penalty

Rs.10,000

39)

Section 272BB- Failure to apply/quote the tax deduction/tax collection number 
Tax deduction number/ tax collection number falsely quoted or the person believes it to be false. 

Rs.10,000 

40)

Section 272BBB - Penalty for failure to comply with the provisions of section 206CA before the 1st day of October, 2004 

Rs.10,000 

Related Articles

Frequently Asked Questions

What is the penalty for failure to furnish information and documents to the authority?

As per section 271AA(2), Rs 5,00,000 is the penalty for failure to furnish information and documents.

What is the penalty for false entry in the books of account?

The assessee should pay a penalty equal to the sum so enter as false entry in the books as penalty according to section 271AAD.

What is the penalty for late filing under income tax?

The penalty for late filing has the limit of Rs 5,000. The income tax department have reduced the limit from Rs 10,000. 

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Quick Summary

The Income Tax Act, 1961 lists various penalties for different offenses, including failure to file returns, maintaining books of account, and not paying taxes. Penalties range from monetary fines to a percentage of the undeclared income, varying based on the type of violation.

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