Income Tax Penalty in India —
Every Section Explained
Late-filing fee under Section 234F, under-reporting and mis-reporting penalties under 270A, TDS and tax-audit penalties, plus 1%-per-month interest under 234A/234B/234C — and how to avoid them.
The most common income tax penalty is the Section 234F late-filing fee: Rs1,000 if total income is Rs5 lakh or less, Rs5,000 if it is higher (nil when income is below the basic exemption limit). Concealing income attracts 50% of tax under Section 270A for under-reporting and 200% for deliberate mis-reporting. Delayed tax and filing also carry 1% per month interest under Sections 234A/234B/234C.
All Key Income Tax Penalties
The Income-tax Act prescribes penalties across many sections. Here is a consolidated reference for AY 2026-27, covering filing, income, TDS, audit and cash-transaction defaults.
| Section | Default / Trigger | Penalty or Fee | Notes |
|---|---|---|---|
| 234F | Late filing of ITR | Rs1,000 / Rs5,000 | Rs1,000 if income ≤ Rs5L, else Rs5,000; nil below exemption |
| 270A | Under-reporting of income | 50% of tax | Applies even without intent |
| 270A | Mis-reporting / concealment | 200% of tax | Deliberate false claims or suppression |
| 271H | Late / wrong TDS-TCS statement | Rs10,000–Rs1,00,000 | Plus late fee under Section 234E |
| 271C | Failure to deduct TDS | = TDS not deducted | Plus interest under Section 201 |
| 271B | Failure to get accounts audited | 0.5% turnover / Rs1.5L | Whichever is lower; tax-audit cases |
| 272A | Failure to furnish PAN / info | Rs10,000 | Per default |
| 276CC | Wilful failure to file ITR | Prosecution | 3 months–2 yrs; up to 7 yrs if tax ≥ Rs25L |
| 271D / 271E | Cash loan / repayment breach | = transaction amount | 269SS / 269T — cash > Rs20,000 |
AY 2026-27 (FY 2025-26) under the Income-tax Act 1961. From 1 April 2026 the Income-tax Act 2025 renumbers many sections (e.g. 234A/B/C → 423/424/425) without changing the rates. Verify on the official portal before acting.
The Section 234F late-filing fee is fixed and automatic — the Assessing Officer cannot reduce or waive it, unlike 270A/271 penalties. It is charged the moment you file even one day past the due date, so filing on time is the only way to avoid it.
Section 234F — Late ITR Filing Fee
If you file your income tax return after the due date (usually 31 July 2026 for non-audit cases for FY 2025-26), a flat late fee applies under Section 234F:
Total income up to Rs5 lakh
- Applies once you cross the due date
- Nil if gross income is below the basic exemption limit
- Charged regardless of whether tax is payable
- Paid as self-assessment before filing
Total income above Rs5 lakh
- Standard 234F fee for higher incomes
- Cannot be waived by the Assessing Officer
- On top of any interest under 234A
- Separate from 270A concealment penalty
A belated return can be filed up to 31 December 2026 for FY 2025-26. Beyond that you may only file an updated return (ITR-U) with additional tax, so filing on time is always cheapest.
Missed the ITR due date? Get your belated return filed correctly.
File My Belated ITR →Section 270A — Under-reporting & Mis-reporting
Section 270A replaced the old Section 271(1)(c) concealment penalty. It has two tiers based on how the income shortfall arose:
Under-reporting — 50% of tax
- Income assessed is more than income you returned
- Often careless omission or a genuine mistake
- Penalty is 50% of the tax on the under-reported amount
- Can be avoided by voluntary disclosure before assessment
Mis-reporting — 200% of tax
- Deliberate suppression or false claims of expenses
- Fake invoices, bogus deductions, unrecorded receipts
- Penalty is 200% of the tax on the mis-reported amount
- Charged on top of the tax and interest already due
How a 270A Penalty Adds Up
50% Under-reporting
200% Mis-reporting
The department pre-fills your income from the Annual Information Statement (AIS) and Form 26AS. Interest, dividends, share sales and property deals are already reported to it — omitting them triggers 270A. Always reconcile AIS before you file.
Got an under-reporting or mis-reporting notice? Respond before penalty is finalised.
Talk to a Tax Expert →Interest under Section 234A, 234B & 234C
Beyond penalties, simple interest at 1% per month (or part of a month) is charged for late filing and short payment of tax. These are interest, not penalties, and generally cannot be waived.
| Section | What it covers | Rate | Period |
|---|---|---|---|
| 234A | Delayed filing of ITR | 1% / month | From the due date to the actual date of filing |
| 234B | Advance tax paid < 90% of assessed tax | 1% / month | From 1 April of the assessment year to payment |
| 234C | Deferment of advance-tax instalments | 1% / month | Per instalment shortfall (15 Jun, 15 Sep, 15 Dec, 15 Mar) |
234C instalment targets are 15%, 45%, 75% and 100% of tax by 15 Jun / 15 Sep / 15 Dec / 15 Mar. Under the Income-tax Act 2025 these become Sections 423/424/425 from 1 April 2026 at the same 1% rate.
Interest under 234B/234C is why advance tax matters even for salaried taxpayers with large capital gains or interest income — TDS alone may not cover 90% of the liability.
Not sure how much advance tax to pay? Get it computed and avoid 234B/234C.
Plan My Advance Tax →How to Avoid Income Tax Penalties
Almost every penalty above is avoidable with timely, accurate compliance. Work through this checklist each year:
- File your ITR before the due date
- Reconcile income with AIS & Form 26AS
- Pay advance tax in the four instalments
- Deduct & deposit TDS on time if you are a deductor
- Get accounts audited if above the tax-audit limit
- Avoid cash loans / repayments above Rs20,000
- Disclose all interest, dividend & capital-gains income
- File a revised or updated return to fix errors early
Voluntary disclosure is your strongest defence. Correcting an omission through a revised or updated return before the department raises it can convert a 200% mis-reporting exposure into just tax plus interest — often saving far more than the filing fee.
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