All You Need to Know about Income Tax Penalties in India
Just as a taxpayer has to pay taxes if the tax slabs apply to their income, there are fines for not paying it as well. You need to be aware of all the penalties that late payment of taxes can attract. By knowing the charges leviable due to certain defaults, you can easily avoid the penalty and file your Income Tax Returns (ITR) without a worry in the world. So, let’s understand the various tax penalties and fees applicable under specific sections along with the defaults that draw charges.
| Nature of Default | Section | Meaning of Default | Penalty Leviable |
| Failure to pay self-assessment tax and interest | 140(A)1 | This is a type of tax to be paid before ITR filing which is payable after allowing credit for advance tax, Tax Deducted at Source (TDS), etc. It also includes any interest or fee. | The penalty leviable depends on the Assessing Officer but should not exceed tax in arrears |
| Default in paying tax | 221(1) | Tax has to be paid within 30 days of tax demand notice | The penalty leviable depends on the Assessing Officer but should not exceed tax in arrears |
| Delayed filing of TDS/TCS | 200(3)
206C(3)
234E |
The person deducting TDS is liable to file the statement with respect to tax deducted by him.
The person collecting TCS has to furnish a statement with respect to tax collected by him. |
A penalty of INR 200 per day till the failure of payment continues, not exceeding TDS/TCS |
| Refusal or failure to comply | 141(1)
143(2)
142(2A)
272A(1)
131(1) |
If the taxpayer refuses to comply with any income tax notice, answer questions, sign the statement, comply with the summons, etc. | A penalty of INR 10,000 for every failure |
| Concealing or misreporting of income | 270A(1) | If the taxpayer under-reports or misreports their income | A penalty of 50% of tax payable will be levied for under-reporting
A penalty of 200% of tax payable will be levied for misreporting |
| Failure to maintain book of account | 44A
271A |
If the taxpayer fails to maintain or retain a book of accounts, documents, etc. that is required. | A penalty of INR 25,000 will be levied |
Now that you know all the tax sections under which you might have to pay a fine, you can heed caution and evade the penalties.
