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Must Known Income Tax Penalties in India

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November 05, 2018
 

Below is a list of must known tax penalties in India.

Default

Relevant Sections of the Act

Meaning

Penalty

Default in Self Assessment Tax

S.140A(1)

S. 221(1)

It is the tax that is to be paid before filing income tax slab rates that is due after allowing credit for Tax Deducted at Source (TDS), advance tax, etc. along with interest and fee.

As much amount as may be imposed by the Assessing Officer, after reasonable opportunity to be heard has been given. The penalty cannot exceed the amount of tax in arrears.

Default in making payment of tax

S. 221(1)

Tax becomes payable within 30 days of service of tax demand notice

-same as above-

Late filing of TDS/TCS Return

S. 200(3)

S. 206C(3)

S. 234E
  • every person liable to deduct tax at source is liable to file the statement in respect of tax deducted by him (TDS)
  • every person liable to collect tax at source has to furnish a statement in respect of tax collected by him (TCS)

Failure to file TDS/TCS on or before the due date will attract levy of Rs. 200/- per day until the time of failure continues, not exceeding the amount of TDS/TCS.

Failure to comply with Income Tax notice

S. 141(1)

S. 143(2)

S.142(2A)

S. 272A

Notice may be served to the taxpayer to

  • File income tax return
  • Produce documents relating to income tax assessment
  • Furnish in writing any other information
  • Audit or re-audit of account
  • Notice produced before scrutiny assessment

Shall be liable for a penalty of Rs. 10,000 for each failure

Concealing income or furnishing wrong details

S. 270A

It is the duty of the taxpayer to furnish the correct details of his income on his tax returns. Underreporting or misreporting will be a default under the provisions of the Act.

50% of tax payable on under-reported income;

200% of tax payable on misreported income

Non-maintenance of book of accounts

S. 44A

S. 271A

A taxpayer is required to duly maintain a book of accounts, documents, etc. under the provisions of the Act

Liable for a penalty of Rs. 25,000

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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