Income Tax Penalties: What and When?

Below are some of the penalties as prescribed by Income Tax Act 1961

1. Penalty for non-filing of Income Tax Return within due date (Section 234F): The penalty of belated filing of income tax return is Rs 5000. However, if the net income of the taxpayer is less than Rs 5 lakh, the penalty is Rs 1000.


2. Penalty for the default in linking PAN with Aadhaar (Section 234H): Every person who is having PAN should link their PAN with aadhaar. If PAN and Aadhaar are not linked, the penalty for linking is Rs 1000.


3. Failure to maintain books of accounts (Section 271A): Every person who are mandated by income tax act u/s 44AA are required to maintain books of accounts, invoices and other documents as prescribed by income tax department. If any person fails to maintain books of accounts, such person is required to Rs 25,000 as penalty for each default.


4. Failure to get the accounts audited or furnish the audit report within due date (Section 271B): Every person who are mandated by the income tax act u/s 44AB are required to upload the audit report within due date. If any person fails to do, such person is required to pay a penalty which is lesser of the below.
   1. 0.5% of turnover (or)
   2. Rs 1,50,000


5. Failure to comply with the provision related to PAN and Aadhaar referred to in sections 139A/139A(5)(c) /(5A)/(5C) (Section 272B): If any person fails to quote PAN or aadhaar or quoted wrong PAN or aadhaar in certain documents, the penalty is Rs 10,000 for each default


6. Penalty u/s 272A(1): If any person refuses or fails to answers questions, sign statements or attend to give evidence or produce books of accounts in compliance with summons u/s 131(1) or comply with notices issued u/s 142(1), 143(2) or failure to comply with directions issued u/s 142(2a), then such person is required to pay a penalty of Rs 10,000 for each default.


7. Furnishing incorrect information (section 271J): If any person furnishes incorrect information in any report or certificate by an accountant or merchant banker or a registered valuer, then the penalty is Rs 10,000 for each such report or certificate.


8. Failure to furnish Form 15CA/15CB (Section 271-I): As per sec 195(6), every person who is responsible for paying to a non-resident or to a foreign company shall furnish form 15CA and form 15CB. If any person fails to do, then the penalty is Rs 1,00,000.


9. Failure to take or accept any loan or deposit or specified sum as per section 269SS (Section 271D): If any persons accepts any loan or deposit or specified sum in contravention of provisions of section 269SS, then the penalty is equal to loan or deposit or specified sum taken or accepted.


10. Receiving an amount of Rs 2 lakh or more from a person in a day as per section 269ST (Section 271DA): If any person receives any amount of Rs 2 lakhs or more from a person in a day which is contravention of Sec 269ST, then the penalty is equal to such receipt.


11. Failure to deduct TDS u/s 192 to 196D (Section 271C): If any person fails to deduct TDS u/s 192 to 196D, then the penalty is equal to tax not deducted or paid.


12. Under Reporting and Mis Reporting of income (Section 270A(1)): The penalty of under reporting and mis reporting of income is as follows
    1. 50% of the amount of tax payable on under reported income
    2. If under reported income is in consequence of any misreporting by any person, the penalty is equal to 200% of amount of tax payable on under reported income