Penalties Section 270A — Penalty for Under-Reporting or Misreporting Income
Section 270A — Penalty for Under-Reporting or Misreporting Income
Income Tax Act 1961 — 270A
The Penalty
50% (under-reporting) or 200% (misreporting) of tax attributable to under/misreported income
- Cap
- None
- Calculation base
- Tax on the income that was under-reported or misreported (computed separately at applicable slab/rate)
- Period
- One-time penalty levied by AO at the time of assessment/reassessment
When does this apply?
AO determines that reported income was lower than assessed income (under-reporting) or income was misrepresented (misreporting)
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Under-reporting: ₹10L income reported vs ₹14L assessed; tax rate 20% | Under-reported income = ₹4L. Tax on ₹4L at 20% = ₹80,000. Penalty = 50% × ₹80,000 = ₹40,000 | ₹40,000 |
| Misreporting (false entry): ₹5L income suppressed; tax rate 30% | Tax on ₹5L at 30% = ₹1,50,000. Penalty = 200% × ₹1,50,000 = ₹3,00,000 | ₹3,00,000 |
How it is levied
AO issues show-cause notice before levying penalty. Taxpayer has right to reply. Appeals lie to CIT(A) → ITAT.
Whether s.270A penalty can be levied simultaneously with prosecution under s.276C — yes, penalty and prosecution are independent proceedings. Confirm with your CA/advocate when a notice is received. For tax year 2026-27 onward: confirm 50%/200% rates under s.439, ITA 2025.