Filing Your Tax Return- Avoid Misreporting or Underreporting As Penalty Implications Arise

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The income tax filing is a diligent exercise and in order that you end up doing it correctly, you need to adhere to the various provisions to be followed and allowed. One such clause requires you to declare all your income irrespective of the fact whether it comes under the tax scanner or not. In case you do not report your income in full, you will be seen as a potential errant on the incidence of under-reporting or mis-reporting your income.

Further, in case you while filing tax return, resort to any of these errors consciously or unconsciously or as the case may be, you will be liable to pay hefty fees for it as penalty amount.

Filing Your Tax Return- Avoid Misreporting or Underreporting As Penalty Implicat

Provision of penalty for mis-reporting or under-reporting in Section 270A and applies for AY 2017-18

The section puts forth that any of the officer in an instance of mis-reporting or under-reporting by the assessee can ask them to pay a penalty amount in addition to any tax incidence arising on such income.

Penalty amount

In case of under-reporting of income, the penalty amount equal to 50% of the tax payable on the under-reported income shall be levied.

In the other incidence, when there is misreporting, the penalty equal to 200% of the tax payable on the misreported income.

Know here what amounts to misreporting and under-reporting

Misreporting- When in a case, a tax assessee suppresses information and facts, does not makes a note of investments in the book of accounts, expenditures are claimed without supporting, false entries are recorded in the books, failure to record any receipt that impacts total income as well as global transactions or any other specified transaction at the domestic level.

Under-reporting- It happens in a scenario after filing of the return by the assessee is of the view that he or she has declared income which is less than his total income.

Or it may also happen in a scenario when the individual does not files return as being advocating that he is exempt from filing return but the actual case may not be so.

Goodreturns.in

Story first published: Tuesday, July 18, 2017, 12:58 [IST]
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