Income Tax Penalty in India — All Sections Explained

Q: What is the penalty for late ITR filing?

Under Section 234F, if you file your ITR after the due date, a late fee of ₹1,000 applies when your total income is ₹5 lakh or below. If your total income exceeds ₹5 lakh, the late fee is ₹5,000. No late fee is levied if your gross total income does not exceed the basic exemption limit.

Q: What is the interest rate on late tax payment?

Interest under Section 234A is charged at 1% per month (simple interest) on the outstanding tax from the due date of filing to the actual date of filing. Section 234B levies 1% per month if advance tax paid is less than 90% of assessed tax, calculated from 1 April of the assessment year. Section 234C charges 1% per month for 3 months on each installment shortfall.

Q: What is the penalty for concealing income in ITR?

Under Section 270A, the penalty for underreporting of income is 50% of the tax payable on the underreported income. For misreporting of income (deliberate concealment), the penalty jumps to 200% of the tax payable on the misreported income. This is in addition to the tax and interest due.

Q: How can I avoid income tax penalties?

File your ITR on or before the due date to avoid Section 234F late fees. Pay advance tax in the correct installments (15 Jun, 15 Sep, 15 Dec, 15 Mar) to avoid Section 234B/234C interest. Disclose all income accurately to avoid Section 270A penalties. Deduct and deposit TDS on time to avoid Section 271C penalties. Use Form 26AS and AIS to reconcile your income before filing.

Q: Can income tax penalties be waived?

Yes, in certain circumstances. The Assessing Officer has discretion to waive or reduce penalties if reasonable cause is shown. Penalties under Section 270A for underreporting (not misreporting) can be avoided if the taxpayer makes a full and voluntary disclosure before the AO. The CBDT also issues circulars providing relief in cases of genuine hardship. Interest under 234A/B/C is generally not waivable.

Updated: 3 June 2026

Key income tax penalties at a glance: Late ITR filing (Section 234F): ₹1,000 if income ≤ ₹5 lakh; ₹5,000 if income > ₹5 lakh. Late/non-payment of tax (Sections 234A/B/C): 1% per month simple interest. Concealment of income (Section 270A): 50% of tax for underreporting or 200% for deliberate misreporting. Non-filing (Section 276CC): prosecution. TDS default (Section 271C): penalty equal to TDS amount not deducted. Voluntary disclosure before assessment significantly reduces exposure.

200% Section 270A — 200% penalty for deliberate misreporting of income. This is on top of the tax and interest already due.

All Key Income Tax Penalties

The Income Tax Act prescribes penalties under multiple sections. Here is a consolidated reference:

Section	Trigger	Penalty / Rate	Notes
234F	Late ITR filing	₹1,000 (income ≤ ₹5L) / ₹5,000 (income > ₹5L)	No fee if gross income ≤ basic exemption
270A	Underreporting of income	50% of tax on underreported income	Applies even without intent
270A	Misreporting / concealment of income	200% of tax on misreported income	Deliberate false claims or suppression
271C	Failure to deduct TDS	Equal to TDS amount not deducted	Plus interest under Section 201
271B	Failure to get books audited (tax audit)	0.5% of turnover or ₹1.5 lakh, whichever is lower	Applies to businesses above threshold
272A	Failure to furnish PAN / TAN	₹10,000 per default	—
276CC	Wilful failure to file ITR	Prosecution: 3 months–2 years (tax < ₹25L); up to 7 years (tax ≥ ₹25L)	Criminal provision — rare but serious
271D/E	Cash transactions exceeding limits (Sections 269SS/269T)	Equal to transaction amount	Accepting/repaying loans in cash > ₹20,000

Interest Provisions — Section 234A, 234B, 234C

Beyond penalties, interest is charged for delayed tax payment and late filing. Interest is calculated as simple interest at 1% per month or part of a month.

Section	What It Covers	Rate	Period
234A	Delayed filing of ITR	1% per month	From due date of filing to actual date of filing
234B	Shortfall in advance tax (paid < 90% of assessed tax)	1% per month	From 1 April of assessment year to date of self-assessment tax payment
234C	Deferment of advance tax installments	1% per month for 3 months	Per installment shortfall (15 Jun, 15 Sep, 15 Dec, 15 Mar)

How to Avoid Income Tax Penalties

Most penalties are avoidable with timely compliance. Key steps: (1) File ITR before the due date (generally 31 July for non-audit cases). (2) Pay advance tax in four installments — 15%, 45%, 75%, and 100% of tax liability. (3) Declare all income correctly — cross-check with Form 26AS and AIS before filing. (4) Deduct and deposit TDS on time if you are a deductor. (5) Maintain proper books of accounts if liable for tax audit. (6) If you discover an error after filing, file a revised return before assessment.

Frequently Asked Questions

What is the penalty for late ITR filing?

Under Section 234F, if you file your ITR after the due date, a late fee of ₹1,000 applies when your total income is ₹5 lakh or below. If your total income exceeds ₹5 lakh, the late fee is ₹5,000. No late fee is levied if your gross total income does not exceed the basic exemption limit.

What is the interest rate on late tax payment?

Interest under Section 234A is charged at 1% per month (simple interest) on the outstanding tax from the due date of filing to the actual date of filing. Section 234B levies 1% per month if advance tax paid is less than 90% of assessed tax, calculated from 1 April of the assessment year. Section 234C charges 1% per month for 3 months on each installment shortfall.

What is the penalty for concealing income in ITR?

Under Section 270A, the penalty for underreporting of income is 50% of the tax payable on the underreported income. For misreporting of income (deliberate concealment), the penalty jumps to 200% of the tax payable on the misreported income. This is in addition to the tax and interest due.

How can I avoid income tax penalties?

File your ITR on or before the due date to avoid Section 234F late fees. Pay advance tax in the correct installments (15 Jun, 15 Sep, 15 Dec, 15 Mar) to avoid Section 234B/234C interest. Disclose all income accurately to avoid Section 270A penalties. Deduct and deposit TDS on time to avoid Section 271C penalties. Use Form 26AS and AIS to reconcile your income before filing.

Can income tax penalties be waived?

Yes, in certain circumstances. The Assessing Officer has discretion to waive or reduce penalties if reasonable cause is shown. Penalties under Section 270A for underreporting (not misreporting) can be avoided if the taxpayer makes a full and voluntary disclosure before the AO. The CBDT also issues circulars providing relief in cases of genuine hardship. Interest under 234A/B/C is generally not waivable.

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