One has to face income tax penalties and late fees if he does not comply with the laws, rules as well as regulations under the Income Tax Act. Having said that, many people think that these income tax penalties and late fees are applicable only on late filing of Income Tax Returns however, that is not the case. There are various other cases wherein you might have to pay penalties and late fees.
Income Tax Penalties and Late Fees
Submit a Claim and avoid it
Income Tax Penalties and Late Fees: How to avoid it?
Report correct income or disclose income from all the sources
In order to avoid income tax liability, many people tend to underreport their total income or do not report all the income from all the sources.
This is called tax evasion and is punishable under the income tax act. And, the penalty for the same is:
- 100% of the tax which was sought to be evaded by the person.
- 300% of the tax which was sought to be evaded by the person.
Apart from the above two points, if the person does not put the correct entries in the books of account and the Income Tax Officer discovers the same, then the person shall be liable to income tax penalties.
Make tax payments as per the Income Tax Slab
One has to pay the income tax as per his tax liability. And, this tax liability depends upon the income tax slab in which the person falls in. Having said that, if the person does not pay the income tax as per his income tax slab rate, then he will have to pay an income tax penalty. This penalty is determined by the Assessing Officer. In any case, the amount of this penalty will not be more than the amount of the tax arrears.
File ITR on time
In order to avoid income tax penalties and late fees, one should make sure that Income Tax filing in India within the due date.