Income Tax Evasion In India: What You Need To Know To Avoid Penalties

Under the Income Tax Act, penalties are levied for various defaults committed by a taxpayer. Apart from penalty on defaults like not making payment of Self Assessment Tax, default in payment of taxes, default on furnishing return of income and others, Income Tax department also levies penalty for underreporting and misreporting of income.

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Under-reporting of income refers to cases where the income reported by the taxpayer in his or her return of income is less than the actual income earned by the taxpayer.

Misreporting of income refers to cases where the taxpayer has given inaccurate or false information in his or her return of income.

Some of the penalties are mandatory and a few are at the discretion of the tax authorities. Many times a taxpayer may try to reduce the tax liability by underreporting or misreporting of income.

In such a case, by virtue of Section 270A, the taxpayer will be held liable for penalty.

Under Section 270A, the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner may, during the course of any proceedings under this Act, direct that any person who has under-reported his income shall be liable to pay a penalty in addition to tax, if any, on the under-reported income.

Read more at : News18

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