As the old saying goes, “There are only two certainties in life, one is Death and the other one is Taxes!!!”
We all had done some mischievous things in school right, but try to recall what happened after you got caught by your principal! A punishment!
Similarly, as an earning adult now, taxes are something you can’t avoid. If you try playing with your taxes, the government will penalize you.
While we can’t escape the liability of paying taxes, we can definitely avoid paying penalties by timely paying taxes and complying with the law.
Let’s understand a few common Income Tax penalties for the defaults in payment of taxes or filing of returns.
Here are a few examples for your better understanding.
Case 1: Riya filed her ITR of F.Y 2021-2022 on 30th September 2022, which is after due date i.e 31st July and her total income is ₹4,95,000, which is below ₹5,00,000, Hence she have to pay a penalty of ₹1,000 in addition to her tax liability.
Case 2: Mohan failed to maintain his accounts, then he will be liable to pay a penalty of ₹25,000.
Case 3: While filing a return Yash intentionally underreported his income by ₹10,20,000. His tax liability on such under-reported income will be ₹1,18,500. So he have to pay a penalty of ₹2,37,000 which is 200% of the tax payable on under-reported income over and above the tax amount. Hence in total, he have to pay the amount of ₹3,55,500 i.e. the original tax amount plus penalty.
Case 4: Aditi received a notice from AO for getting her accounts audited by a chartered accountant, but she neglected it. So now she will receive another notice from AO to pay a penalty of ₹10,000.
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