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.
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