Penalty refers to a punishment charged to a person for breaking any rule or law. Income-tax Act has also given some penalties in case a taxpayer breaks any provision of Income-tax Act, however all the penalties are not popular.
Listed below are some of the most common penalties imposed on a taxpayer.
|Sr. No.||Section No.||Explanation of penalty||Amount of penalty|
|1||272B||If taxpayer fails to quote his PAN (permanent account number) in all Income-tax returns, challans, communications etc.||Rs. 10,000/-|
|2||271F||If taxpayer fails to file his Income-tax return for any financial year when he was required to file it.||Rs. 5,000/-|
|3||140(A)(3)||If the taxpayer fails to pay Income-tax, interest thereon before filing his Income-tax return.||Penalty equals to outstanding tax amount|
|4||271A||If the taxpayer fails to keep and maintain books of accounts of certain business/profession||Rs. 25,000/-|
|5||271B||If the taxpayer fails to get his books of accounts of certain business/profession audited by a Chartered Accountant.||Lower of :-
0.5% of the sales or Rs. 1,50,000/-
|6||271(1)(b)||If the taxpayer receives any notice from Income-tax department about filing of return, submission of books, documents, records etc. to officer and he fails to satisfy such notice.||Rs. 10,000/-|
|7||271(1)(c)||a.If the taxpayer has concealed (kept secret) his income.
b. If the taxpayer has given wrong particulars of his income to the Income-tax department.
|100% to 300% of the amount tax evasion|
From the above, penalties under section 271A and 271B are applicable only in case where taxpayer is running business or profession.
Income-tax Act has listed the business/profession which need to keep and maintaining books.