Tuesday, June 6, 2017

Penalties which impose under the Income-Tax Act.

The following table highlights major penalties which will impose under the Income-tax Act.

Nature of default/failure
Sections
Penalty
Default in payment of any tax due
Section 221(1)
Such an amount as the Assessing Officer may impose but not exceeding the amount of tax.
Determination of undisclosed income of block period
Section 158BFA(2)
Minimum : 100 per cent of tax leviable in respect of
undisclosed income
Maximum : 300 per cent of tax leviable in respect of
undisclosed income.
Under-reporting and
misreporting of income
Section 270A(1)
sum equal to 50% of the
amount of tax payable on
under-reported income.

However, if under-eported
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-eported income
Failure to comply with
notice issued under section 142(1) or section 143(2) and direction for audit under section 142(2A).
Section 271(1)(b)
Rs. 10,000 for each failure.
This section shall not apply to and in relation to any
assessment for the A.Y
commencing on or after the 1st day of April, 2017.
Concealment of income or
furnishing inaccurate
particulars of income
Section 271(1)(c)
100% to 300% of the tax
evaded.
This section shall not apply to and in relation to any
assessment for the A.Y
commencing on or after the 1st day of April, 2017.
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
Section 271(4)
Not exceeding 150 per cent of difference between tax on partner's income assessed and tax on income returned, in
addition to tax payable

This section shall not apply to and in relation to any
assessment for the A.Y
commencing on or after the 1st day of April, 2017.
Failure to keep, maintain or retain books of account, documents, etc., as are required under section
44AA
Section 271A
Rs. 25,000
Failure to keep and maintain information and documents required in respect of international transaction or specified domestic transaction, failure to report such transaction, etc.
Section 271AA
2% of the value of each
international transaction or specified domestic transaction entered into by the taxpayer
Failure to furnish information and document as required under Section 92D(4)
Section 271AA(2)
Rs. 5,00,000/-
Penalty in case of search
Section 271AAB
10%, 20% and 60% of the
undisclosed income, as the case may be.
Failure to get accounts audited or furnish a report of audit as required under section 44AB
Section 271B
One-half per cent of total sales, turnover or gross receipts, etc., or Rs. 1,50,000, whichever is less
Failure to furnish a report from an accountant as required by section 92E
Section 271BA
Rs. 1,00,000
Failure to deduct tax at
source, wholly or partly or
failure to pay wholly or
partly tax under section 115-O(2)
Section 271C
An amount equal to tax not deducted (in case of TDS) or tax not paid (in case of dividend distribution tax)
Failure to collect tax at Source
Section 271CA
An amount equal to tax not
Collected
Taking or accepting certain loans or deposits or specified sum* in contravention of 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.
Section 271D
An amount equal to loan or deposit or specified sum so taken or accepted
Repaying loans or deposits
or specified advance* in
contravention of provisions
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
Section 271E
An amount equal to loan or deposit or specified advance so repaid
Failure to furnish the return of income before the end of the assessment year
Section 271F
Rs. 5,000
Failure to furnish statement of financial transaction or reportable account (previously called as Annual Information Return) as required under section 285BA(1)
Section 271FA
Rs. 100 or Rs.500, as the case may be, per day of default
Failure to furnish an accurate statement of financial transaction or reportable account
Section 271FAA
Rs. 50,000
Failure to furnish statement or information or document [as required under Section 9A(5)] by an eligible investment fund within the prescribed time-limit.
Section 271FAB
An amount equal to Rs.
5,00,000
Failure to furnish any
information or document as required by section 92D(3)
Section 271G
2% of the value of the
international transaction or
specified domestic transaction for each such failure
Failure to furnish information or document under section 285A* by an Indian concern.

*Section 285A provides that where any share or interest of foreign company derives its value substantially from assets located in India, and such company holds such assets in India through
Indian Concern then such Indian concern shall furnish the prescribed information to the income-tax authority
Section 271GA
A sum equal to 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 or control in relation to the Indian concern;

An amount equal to Rs.
5,00,000 in any other case
Failure to furnish report under section 286(2)
Section 271GB(1)
Rs. 5,000 per day up to 30 days and Rs. 15,000 per day beyond 30 days
Failure to produce the information and documents within the period allowed under section 271GB(6)
Section 271GB(2)
Rs. 5,000 for every day during which the failure continues
Failure to furnish report or
failure to produce information/documents
under section 286 even after
serving order under section
271GB(1) or 271GB(2)
Section 271GB(3)
Rs. 50,000 for every day for which such failure continues beginning from the date of serving such order.
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).
Section 271GB(4)
Rs. 5,00,000
Failure to file the TDS/TCS
Return
Section 271H
Not less than Rs.10,000 and
upto Rs. 1,00,000
Failure to furnish information or furnishing of inaccurate information under Section 195(6) in respect of payment made to non-residents.
Section 271-I
An amount equal to Rs.
1,00,000
Failure to co-operate with the tax authorities, (i.e., not answering any question, not signing statements, etc.) or failure to comply with notice issued under section 142(1)/143(2) or failure to comply with direction issued under section 142(2A).
Section 272A(1)
Rs. 10,000 for each
failure/default
Penalty under section
272A(2)
Section 272A(2)
Rs. 100 per day for every day during which the default continues.
Failure to comply with section 133B
Section 272AA(1)
An amount not exceeding Rs. 1,000
Failure to comply with provisions relating to Permanent Account Number (PAN)
Section 272B
Rs. 10,000
Failure to comply with provisions relating to Tax Deduction Account Number or Tax Collection Account
Number
Section 272BB(1)
Rs. 10,000
Failure to comply with the provisions relating to Tax Collection Account Number
Section 272BBB
Rs. 10,000