Income-tax penalties

Penalty refers to a punishment charged to a person for breaking any rule or law. Income-tax Act has also given some penalties in case a taxpayer breaks any provision of Income-tax Act, however all the penalties are not popular.

Listed below are some of the most common penalties imposed on a taxpayer.

Sr. No. Section No. Explanation of penalty Amount of penalty
1 272B If taxpayer fails to quote his PAN (permanent account number) in all Income-tax returns, challans, communications etc. Rs. 10,000/-
2 271F If taxpayer fails to file his Income-tax return for any financial year when he was required to file it. Rs. 5,000/-
3 140(A)(3) If the taxpayer fails to pay Income-tax, interest thereon before filing his Income-tax return. Penalty equals to outstanding tax amount
4 271A If the taxpayer fails to keep and maintain books of accounts of certain business/profession Rs. 50,000/-
5 271B If the taxpayer fails to get his books of accounts of certain business/profession audited by a Chartered Accountant. Lower of :-

0.5% of the sales or Rs. 1,50,000/-

6 271(1)(b) If the taxpayer receives any notice from Income-tax department about filing of return, submission of books, documents, records etc. to officer and he fails to satisfy such notice. Rs. 10,000/-
7 271(1)(c) a. If the taxpayer has concealed (kept secret) his income.

b. If the taxpayer has given wrong particulars of his income to the Income-tax department.

100% to 300% of the amount tax evasion

From the above, penalties under section 271A and 271B are applicable only in case where taxpayer is running business or profession.

Income-tax Act has listed the business/profession which need to keep and maintaining books.

Click here to know such business/profession.

Summary
Article Name
Income-tax penalties
Description
Penalty refers to a punishment charged to a person for breaking any rule or law. Income-tax Act has also given some penalties in case a taxpayer breaks any provision of Income-tax Act, however all the penalties are not popular.
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myITreturn
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