Must know tax penalties in India | Fusion - WeRIndia

Must know tax penalties in India

Must know tax penalties in India

Many people are probably already familiar that the Income tax department of India has set various fees and tax penalties depending on the situation. However, many tax payers tend to neglect and ignore notices from the Income Tax Department out of ignorance and they can become quite expensive later. Here are some of the penalties you should be aware of.

Penalty for default in making payment of Self-Assessment Tax

If one fails to pay either wholly or partly self-assessment tax or interest, then he/she will be considered as assessee in default in respect of unpaid amount. This means he/she is liable to pay penalty of such amount depending on how much the Assessing Officer may impose. Note that the total amount of penalty cannot exceed the amount of tax in arrears.

Penalty for default in making payment of tax

An individual must pay tax when a demand notice under section 156 has been issued. It should paid within a period of 30 days the service of the notice. If the taxpayer proves satisfactorily about justification for defaulting, there will be no penalty.

Late filing fees for delay in filing the TDS/TCS statement

Everyone who is liable to deduct tax at source is liable to file the statement deducted by him (TDS return). Failing this, the person is 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

If a taxpayer does not comply with notice issued to him or with a direction issued, then he/she is liable for a penalty. For each failure of complying, the taxpayer shall be liable for a penalty of Rs 10,000.

Penalty for underreporting and misreporting of income

Many taxpayers try to reduce tax liability by underreporting income. The penalty for this is fifty per cent of the tax payable on under-reported income. If this happens in case of misreporting of income, the taxpayer is liable for penalty at the rate of two hundred per cent of the tax payable on misreported income.

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