Indian Tax Law | Updated October 2026

Income Tax Penalties in India: Sections, Amounts and Rules

Income-tax penalties in India depend on the type of default, relevant tax year, notice, and statutory conditions. This guide explains the provisions originally covered in this article and distinguishes historical provisions from later amendments.

Important transition: The Income-tax Act, 2025 applies from 1 April 2026. Earlier years and proceedings may continue under the Income-tax Act, 1961 subject to repeal and savings provisions. Section numbers and penalty rules under the 2025 Act differ. Check the applicable tax year before relying on a rate.

Penalty provisions under the Income-tax Act, 1961

The table summarises the scope of each provision. Amounts are indicative of the amended 1961 Act where stated, and historical provisions are identified. Consult the exact legislation and notifications for the relevant period.

Section	Default and penalty
158BFA(2)	Block assessment undisclosed income For relevant search block assessments, penalty may range from 100% to 300% of tax on undisclosed income, subject to statutory conditions. The provision has a historical and subsequently reintroduced context; verify the search date and applicable version.
221(1)	Default in payment of tax Discretionary penalty up to the amount of tax in arrears. No penalty where the taxpayer proves good and sufficient reasons for the default.
271(1)(b)	Failure to comply with specified notices Historically Rs. 10,000 for each failure; for later periods, check section 272A(1)(d) and the applicable version.
271(1)(c)	Concealment or inaccurate particulars Historically 100% to 300% of tax sought to be evaded. For assessment years beginning on or after 1 April 2017, the principal regime is section 270A.
271(1)(d)	Fringe benefit concealment Legacy fringe-benefit-tax provision; not a general current penalty.
271(4)	Partner income from improper profit distribution Historical partnership provision; applicability depends on the year and then-operative law.
271A	Failure to maintain books of account Rs. 25,000 for failure to keep, maintain or retain records required by section 44AA.
271AA	Transfer pricing documentation Generally 2% of value of each international or specified domestic transaction for specified documentation failures; additional rules may apply.
271AAA	Undisclosed income in specified searches Generally 10% of undisclosed income for searches in the statutory historical window; conditions for relief may apply.
271B	Tax audit default Lower of 0.5% of turnover/gross receipts and Rs. 1,50,000 for non-compliance with section 44AB.
271BA	Transfer pricing audit report Rs. 1,00,000 for failure to furnish report under section 92E.
271C	Failure to deduct or pay specified tax Penalty generally equal to tax not deducted or specified tax not paid, as covered by the provision.
271CA	Failure to collect tax at source Penalty generally equal to tax not collected under applicable TCS provisions.
271D	Improper acceptance of loans or deposits Penalty equal to loan, deposit or specified sum accepted contrary to section 269SS.
271E	Improper repayment of loans or deposits Penalty equal to loan, deposit or specified advance repaid contrary to section 269T.
271F	Late filing of income tax return Legacy Rs. 5,000 penalty provision; late-filing fees under section 234F generally replaced this regime for later assessment years.
271FA	Failure to file statement of financial transactions Generally Rs. 500 per day; Rs. 1,000 per day for continued failure after notice, subject to applicable provisions.
271FB	Fringe benefits return default Legacy provision tied to fringe-benefit-tax returns.
271G	Failure to provide transfer pricing information Generally 2% of the value of each relevant international or specified domestic transaction.
272A(1)	Failure to answer, sign or comply with summons Generally Rs. 10,000 per specified default.
272A(2)	Failure to furnish prescribed information or returns Generally Rs. 500 per day for specified defaults under the amended regime, subject to limitations and statutory exclusions.
272AA	Failure to comply with information collection Historical maximum Rs. 1,000 under section 133B-related requirements; check applicable amendments.
272B	PAN compliance defaults Generally Rs. 10,000 for specified failures relating to PAN/Aadhaar.
272BB	TAN compliance defaults Generally Rs. 10,000 for specified failures relating to TAN.

Important additional penalties and safeguards

Section 270A: For applicable assessment years, under-reporting of income ordinarily attracts 50% of tax on under-reported income, and misreporting attracts 200%, subject to the statutory definitions and exceptions.

Sections 271AAC and 271AAB: Special rules govern certain unexplained income and undisclosed income found in specified searches. Their rates and conditions depend on the relevant assessment year and search date.

Sections 271H, 271-I, 271J and 271K: Other penalties concern TDS/TCS statements, information on non-resident payments, incorrect professional reports and specified reporting by institutions.

Section 273B: Several listed defaults do not attract penalty where reasonable cause is established; this relief is not universal.

Section 274: A reasonable opportunity of being heard is required before imposition of penalty. Approval requirements may also apply.

Section 275: Statutory time limits apply; the period depends on the proceeding and the law applicable to it.

Section 270AA: Limited immunity may be available on fulfilment of prescribed conditions. Sections 273A and 273AA address other limited reliefs.

Who may impose a penalty?

The Assessing Officer and other designated tax authorities have powers assigned by the relevant provision. The Finance Act, 2025 changed the competent authority for several penalties, including sections 271C, 271CA, 271D and 271E. Do not rely on historical references to the Joint Commissioner without checking the applicable version and approval requirements.

Official legislation and references

This article provides general legal information and is not a substitute for examination of the law applicable to a particular assessment year and proceeding.