Section 270A — Penalty for Under-Reporting and Misreporting of Income

Updated: 3 June 2026 | Income-tax Act, 2025 | Applicable from FY 2017-18 (AY 2018-19)

Section 270A penalty: 50% of tax on under-reported income (inadvertent omission); 200% of tax on misreported income (deliberate fraud, false documents, suppression of facts). Section 270A replaced the old Section 271(1)(c) from FY 2017-18 onwards. Immunity from penalty is available under Section 270AA if you pay full tax + interest within 30 days and do not appeal.

200%

200% penalty on tax applies for misreporting — the highest penalty short of prosecution.
Misreporting includes false documents, suppression of facts, failure to record income. Unlike 50% under-reporting, 200% misreporting is not eligible for immunity under Section 270AA.

Section 270A Penalty Rates at a Glance

Category	Penalty Rate	Nature	Immunity Available?
Under-Reporting of Income	50% of tax on under-reported income	Inadvertent omission, computational error, etc.	Yes — Sec 270AA
Misreporting of Income	200% of tax on misreported income	Fraud, false documents, suppression of facts	No

What Is Under-Reporting Under Section 270A?

Under-reporting occurs when the income assessed by the Assessing Officer (AO) is higher than the income declared in your ITR. Section 270A(2) defines specific circumstances of under-reporting:

Income assessed or re-assessed is greater than the income declared in the ITR.
No ITR filed but income assessed exceeds the basic exemption limit.
Income assessed under Section 115JB (MAT) exceeds the book profit declared.
Assessed income is greater than the income assessed in the previous assessment order (in case of revised assessment).

Penalty calculation: 50% × (tax on assessed income − tax on declared income).

Example: You declared income of ₹10 lakh but the AO assessed ₹12 lakh (found ₹2 lakh of FD interest not reported). Tax on ₹2 lakh unreported income = ₹60,000. Section 270A penalty = 50% × ₹60,000 = ₹30,000.

What Is Misreporting Under Section 270A?

Misreporting is deliberate fraudulent concealment. Section 270A(9) lists six specific categories that constitute misreporting:

Misrepresentation or suppression of facts — intentionally hiding information from the AO.
Failure to record investments in books — off-book investments, benami transactions.
Claiming false expenditure — inflated or fictitious expenses to reduce taxable income.
Failure to record receipts in books of account — cash receipts not entered in accounts.
Failure to report income from any asset (including financial interest) outside India.
Use of forged or fabricated documents to support claims.

Penalty calculation: 200% × (tax on misreported income).

Important: If an addition by the AO covers both under-reporting and misreporting, the penalty is bifurcated: 50% applies to the under-reported portion and 200% to the misreported portion. The AO must specify which category applies in the penalty order.

Section 270A vs Old Section 271(1)(c) — Comparison

Parameter	Section 270A (from FY 2017-18)	Old Section 271(1)(c) (up to FY 2016-17)
Applicable from	AY 2018-19 onwards	Up to AY 2017-18
Penalty range	50% (under-reporting) or 200% (misreporting)	100% to 300% (discretionary range)
AO discretion	Limited — defined categories; tiers are fixed	High — AO could levy anywhere from 100% to 300%
Immunity provision	Section 270AA (clear — pay tax+interest in 30 days)	Section 273A (Commissioner discretion — not time-bound)
Definition clarity	High — 6 defined misreporting categories	Low — “concealment or furnishing inaccurate particulars”

How to Avoid Section 270A Penalty — Immunity Under Section 270AA

Section 270AA provides a clear immunity route from Section 270A penalty for under-reporting cases. The conditions are:

An assessment or reassessment order has been passed under Section 143(3) or 147.
You pay the entire tax and interest specified in the order within the time allowed.
You apply in Form No. 68 to the Assessing Officer within 1 month from the date of the assessment order.
You do not file an appeal against the assessment order.

If all conditions are met, the AO shall grant immunity — it is not discretionary. The AO must pass an immunity order within 1 month from receipt of Form 68.

Note: Immunity under Section 270AA is not available for misreporting cases (200% penalty). It only applies to under-reporting (50% penalty). If both categories are involved, immunity is available only for the under-reporting portion.

Frequently Asked Questions

What is the penalty under Section 270A for under-reporting income?

Under Section 270A, the penalty for under-reporting income is 50% of the tax payable on the under-reported income. Under-reporting means the income assessed by the Assessing Officer is higher than the income declared by the taxpayer (or higher than the last assessed income in certain cases). The penalty is calculated on the tax attributable to the under-reported income — not on the total tax liability.

What is the penalty for misreporting income under Section 270A?

The penalty for misreporting income under Section 270A is 200% of the tax payable on the misreported income. Misreporting is a more serious offence than under-reporting and includes: (a) misrepresentation or suppression of facts; (b) failure to record investments in books; (c) claiming false expenditure; (d) failure to record receipts in books; (e) failure to report income from assets outside India; (f) use of forged documents. The 200% penalty is equivalent to the penalty that previously existed under Section 271(1)(c).

What is the difference between under-reporting and misreporting under Section 270A?

Under-reporting is an inadvertent or unintentional shortfall in declared income — for example, forgetting to report FD interest or a small capital gain. The penalty is 50% of the tax on the unreported amount. Misreporting is deliberate and fraudulent concealment — such as using false documents, suppressing facts, or claiming bogus deductions. The penalty is 200%. The Assessing Officer must specifically identify and prove the category of misreporting to levy 200%. If the AO cannot establish misreporting, only 50% applies.

How does Section 270A differ from the old Section 271?

Section 271(1)(c) was the old penalty provision for concealment of income, attracting 100% to 300% of the tax on concealed income. It was replaced by Section 270A from FY 2017-18 (AY 2018-19) onwards. Key differences: (1) 270A has two distinct tiers — 50% for under-reporting, 200% for misreporting — whereas 271(1)(c) was a range of 100–300%. (2) 270A defines specific categories of under-reporting and misreporting with more precision. (3) The immunity provision under 270A is clearer: pay tax + interest within 30 days of order → no penalty. Under Section 271, the immunity was less structured.

How can I get immunity from Section 270A penalty?

Section 270AA provides immunity from Section 270A penalty. If you receive an order under Section 143(3) or 147 with under-reported income, you can apply for immunity under Section 270AA by: (1) paying the tax and interest specified in the order in full; (2) applying in Form No. 68 within 1 month from the date of the order; (3) not filing an appeal against the assessment order. If the conditions are met, the Assessing Officer must grant immunity and no Section 270A penalty is levied. Immunity is NOT available for misreporting cases (200% penalty category).

Section 271 (Old Penalty) Income Tax Penalties IT Notice Reply Tax Assessment Guide Scrutiny Notice (143(3)) Appeal to CIT(A)

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