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6 Must Know Income Tax Penalties in India

Ritam Dutta
21 Aug 2016
Read Time : 5 Mins
6 Must Know Income Tax Penalties in India

Penalty for default in making payment of Self Assessment Tax

If a person fails to pay either wholly or partly self assessment tax or interest, then he will be treated as assessee in default in respect of unpaid amount.

If a taxpayer is treated as an assessee in default, then he shall be held liable to pay penalty of such amount as the Assessing Officer may impose and in the case of a continuing default, such further amount(s) as the assessing officer may, from time to time, direct. However, the total amount of penalty cannot exceed the amount of tax in arrears.

Penalty for delay in filing the TDS/TCS statement

Every person liable to deduct tax at source is liable to file the statement in respect of tax deducted by him/her  i.e. TDS return.
If a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues.


Penalty for failure to comply with notice

As per Income tax act, penalty is levied if a taxpayer fails to comply with notice issued to him or fails to comply with a direction issued.
If the taxpayer fails to comply with notice issued to him he shall be liable for a penalty of Rs 10,000 for each failure.




Penalty for underreporting and misreporting of income

Many times a taxpayer may try to reduce his/her tax liability by underreporting of income. The rate of penalty shall be fifty per cent of the tax payable on under-reported income.
However, in a case where under-reporting of income results from misreporting of income, the taxpayer shall be liable for penalty at the rate of 200% of the tax payable on such misreported income.



Penalty for default in making payment of tax

When a demand notice Under Section 156 is issued to the taxpayer for payment of tax then such amount shall be paid within a period of 30 days of the service of the notice at the place and to the person mentioned in the notice.
The tax authorities shall give the taxpayer a reasonable opportunity of being heard. No penalty is levied if the taxpayer proves to the satisfaction of the tax authorities that the default was for good and sufficient reason.


Failure to furnish statement Annual Information Return

Non-furnishing of statement of financial transaction or reportable account will attract penalty Under Section 271FA. Penalty shall be levied of Rs 100 per day by default.









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Authored By Ritam Dutta

Ritam Dutta is an official partner of "Day On My Plate". He is an entrepreneur in mind and passionate blogger by heart. Moreover, he is also an academician, author, public speaker, investor, and internet personality.


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