Preparing your tax return? Watch out for these penalties

Avoid tax penalties: Are you ready to file your Income Tax Return? As the deadline approaches, it’s crucial for taxpayers to understand potential penalties under the Income Tax Act, 1961. Ensuring compliance is key to avoiding financial repercussions. Here's a list of penalties to watch out for:

Section 158BFA

Penalties range from 100 per cent to 300 per cent of the tax payable on undisclosed income during a block period initiated under a search or requisition.

Section 221(1)

Penalties are determined by the assessing officer for default in tax payment, capped at the amount of tax in arrears.

Section 234E

A penalty of Rs 200 per day applies for failure to file returns related to TDS/TCS within prescribed timelines, limited to the TDS/TCS amount.

Section 234F

A penalty of Rs 5,000 is levied if the ITR is furnished after the due date but before December 31, increasing to Rs 10,000 thereafter, with a reduced penalty of Rs 1,000 for incomes below Rs 5 lakh.

Section 270A

Penalties for under-reporting or misreporting income range from 50 per cent to 200 per cent of the tax payable on the under-reported amount.

Section 271A

A penalty of Rs 25,000 is imposed for failure to maintain required books of account or documents under Section 44AA.

Section 271AA

Penalties for non-compliance with international transactions reporting requirements amount to 2 per cent of the transaction value.

Section 271AAA

A penalty of 10 per cent of undisclosed income is applicable for specified previous years if search was initiated between June 1, 2007, and July 1, 2012.

Section 271AAB

Penalties range from 10 per cent to 60 per cent of undisclosed income for searches initiated after specific dates and conditions.

Section 271AAD

Penalty for false entries such as fake invoices or omitted relevant entries in books of account.

Section 271B

A penalty of half per cent of total sales or Rs 1,50,000 applies for failure to get accounts audited or furnish audit report as required under Section 44AB.

Section 271CA

Penalty equivalent to tax not collected for failure to collect tax at source.

Section 271D

Penalty equivalent to the loan or deposit amount taken in contravention of Section 269SS.

Section 271E

Penalty equivalent to the loan or deposit amount repaid in contravention of Section 269T.

Section 271FAB

A penalty of Rs 5,00,000 is imposed for failure to furnish statement/information/document by an eligible investment fund within the prescribed time.

Section 271FAA

A penalty of Rs 50,000 applies for furnishing an inaccurate statement of a financial transaction or reportable account.

Section 271J

A penalty of Rs 10,000 is levied for incorrect information in reports/certificates by accountant/merchant banker/registered valuer.

Section 272A(1)

A penalty of Rs 10,000 is applicable for each default related to non-compliance with IT authority notices or summons.

Section 272A(2)

A penalty of Rs 500 per day is levied for various non-compliance issues related to statements, returns, or certificates.

Section 272B

A penalty of Rs 10,000 is imposed for failure to comply with PAN related requirements under Section 139A.

Section 272BB

A penalty of Rs 10,000 applies for failure to apply or quote tax deduction/tax collection number correctly.

Section 272BBB

A penalty of Rs 10,000 is imposed for failure to comply with provisions of section 206CA before October 1, 2004.

Section 272AA

A penalty of Rs 1,000 is applicable for failure to comply with IT authority’s requirement to provide information under Section 133B.

Section 272CA

A penalty of Rs 1,00,000 is imposed for failure to quote PAN in specified documents as per Section 139(5)(c).

Section 272CCC

A penalty of Rs 10,000 applies for failure to comply with provisions regarding tax credit for contributions to political parties under Section 80GGB and 80GGC.

Experts advise taxpayers to ensure timely and accurate compliance with these provisions to avoid penalties and streamline their tax filing process effectively.