Different types of Income Tax Penalties

By | January 15, 2016

Incometaxtips.inAn assessee has been made liable to penalties for the defaults or non-compliance committed by him under the various provisions of income tax act. As against various exemptions, reliefs & deductions income tax act also levy/charge various types of penalties on its tax payers who does not comply with provisions of the income tax act. Some of the compliances are known and some are unknown to the large number of medium and small tax payers.

This article tries to explain various penalties as defined under Income Tax Act. For easy understanding we are categories the penalties in following;

  1.  Failure to pay the taxes within due dates
  2. Non Compliance’s
  3. Concealment or Inaccurate particulars of information
  4. Non-fulfillment of Audit, Books of Accounts or Loans
  5. Cross Border Transactions
  6. Non Compliance related to TDS

The following are the examples of non-compliance which typically falls in one or more than categories defined above.

  • Penalties for Failure to deduct TDS / TCS in full and part,
  • Quoting false TAN in challan/ statements,
  • Failure to apply for TAN, Failure to furnish e TDS statement / TDS certificate,
  • Failure to comply with department letter,
  • Failure to furnish information required u/s. 133B,
  • Failure to apply for PAN / TCN,
  • Failure to keep and maintain information and documents u/s. 92D,
  • Failure to furnish a report as required u/s. 92E,
  • Failure to maintain books or documents u/s. 44AA,
  • Failure to get accounts audited  u/s. 44AB,
  • Taking loan in contravention of Sec. 269SS,
  • Repayment of loan in contravention of Sec. 269T,
  • Failure to furnish Return of Income,
  • On Undisclosed income found during search intimation u/s 132,
  • Failure to comply  with the notice u/S 115WD(2)/ 115WE(2)/ 143(1)/ 142(2),
  • Failure to comply  with direction u/s 142(2A) to get audited ,
  • Failure to answer questions or sign statements,
  • Non Payment of Tax including Self-Assessment Tax.

incometaxtips.inGiven below the chart which explains the section-wise details of Penalty, Nature of Default and Quantum of penalty

 

PENALTIES UNDER INCOME TAX ACT
Section Nature of Default Quantum of penalty
Failure to pay the taxes within due dates

221(1)

Tax payments including  Self-Assessment Tax Amount of tax in arrears
Non Compliance’s
271(1)(b) with the notice u/S 115WD(2)/ 115WE(2)/ 143(1)/ 142(2) Rs. 10,000 of each failure
271(1)(b) with direction u/s 142(2A) to get audited Rs. 10,000 of each failure
272A (1) Failure to answer questions or sign statements Rs. 10,000 of each failure
Concealment or Inaccurate particulars of information
271(1)(c) Concealment of income or inaccurate particulars 100 % to 300 % of tax sought to be evaded
271AAA Undisclosed income found during search intimation u/s 132 10% of undisclosed income
Non-fulfillment of Audit, Books of Accounts or Loans

271A

Failure to maintain books or documents u/s. 44AA. Rs. 25,000
271B Failure to get accounts audited  u/s. 44AB. 0.5% of total sales, or Rs.1,50,000 whichever is less
271D Taking loan in contravention of Sec. 269SS Equal to amount of loan  taken
271E Repayment of loan in contravention of Sec. 269T Amount of deposit or repaid
271F Failure to furnish Return of Income Rs. 5,000
Cross Border transactions
271AA Failure to keep and maintain information and documents u/s. 92D. 2%  of value
271BA Failure to furnish a report as required u/s. 92E. Rs. 1,00,000
Non-Compliance related to TDS
271C Failure to deduct TDS in full and part Equal to the amount failed to be deducted
271CA Failure to collect TDS in full and part Equal to the amount failed to be collected
272BB(1A) Quoting false TAN in challan/ statements Rs. 10,000
272BB(1) Failure to apply for TAN Rs. 10,000
271H Failure to furnish e TDS statement Rs 10,000 to 1 lacks
272A(2) (g) Failure to furnish TDS certificate Rs 100 per day .
272A(2) Failure to comply with department letter Rs. 100 for every day during which the failure continues
272AA(1) Failure to furnish information required u/s. 133B Rs. 1,000
272B Failure to apply for Permanent Account Number (PAN) Rs. 10,000
272BBB Failure to apply for Tax Collection Account No. (TCN) Rs. 10,000

 

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