-
September 22, 2026
-
BySiddhi R
Income Tax Penalty Chart 2026: Sections, Defaults and Penalties
Introduction
The income tax penalty chart helps taxpayers understand the consequences of late filing, incorrect reporting, TDS or TCS defaults, cash transaction violations and other non-compliances. In 2026, the applicable provision depends on whether a matter falls under the Income-tax Act, 1961 or the Income-tax Act, 2025.
The Income-tax Act, 2025, applies from 1 April 2026 and governs Tax Year 2026-27 and subsequent tax years. However, AY 2026-27, which relates to income earned during FY 2025-26, continues to be governed by the Income-tax Act, 1961.
Key Highlights
- The Income-tax Act, 2025, applies to Tax Year 2026-27 and subsequent tax years.
- AY 2026-27 and earlier matters continue to be governed by the Income-tax Act, 1961 where applicable.
- The income tax penalty chart includes both fees and penalties because their legal treatment differs.
- Late ITR filing can attract a fee of ₹1,000 or ₹5,000 depending on total income.
- Misreporting of income can attract a penalty equal to 200% of the tax payable on the under-reported income, subject to the conditions prescribed under the applicable provision.
Income Tax Penalty Chart Under the Income-tax Act, 1961
A penalty under the Income-tax Act, 1961 may continue to apply for AY 2026-27 and earlier periods where the provisions of the 1961 Act remain applicable.
The major penalty provisions under the Income-tax Act, 1961 include:
|
Section |
Nature of Default |
Fee / Penalty |
|
234E |
Delay in filing TDS/TCS statement |
₹200 per day, capped at the amount of TDS/TCS |
|
234F |
Failure to furnish ITR within the prescribed due date |
₹1,000 where total income does not exceed ₹5 lakh; otherwise ₹5,000 |
|
234G |
Failure to furnish statement or certificate prescribed under Section 35 or Section 80G |
₹200 per day |
|
270A |
Under-reporting / misreporting of income |
50% of tax on under-reported income; 200% where under-reporting results from misreporting |
|
271A |
Failure to maintain prescribed books or documents |
₹25,000 |
|
271B |
Failure to get accounts audited or furnish an audit report under Section 44AB |
0.5% of sales, turnover or gross receipts or ₹1,50,000, whichever is lower |
|
271BA |
Failure to furnish a report under Section 92E |
₹1,00,000 |
|
271C |
Failure to deduct specified TDS |
Amount equal to tax not deducted or paid |
|
271CA |
Failure to collect TCS |
Amount equal to tax not collected |
|
271D |
Acceptance of a loan, deposit, or specified sum contrary to Section 269SS |
Amount equal to the sum accepted |
|
271DA |
Receipt contrary to Section 269ST |
Amount equal to the prohibited receipt |
|
271DB |
Failure to provide prescribed electronic payment facility |
₹5,000 for every day of default |
|
271E |
Repayment contrary to Section 269T |
Amount equal to the sum repaid |
|
271H |
Failure to furnish TDS/TCS statement or furnishing incorrect information |
₹10,000 to ₹1,00,000, subject to statutory conditions |
|
271K |
Failure relating to specified statements or certificates under Sections 35 and 80G |
₹10,000 to ₹1,00,000 |
|
272A(1) |
Certain failures involving questions, statements, summons or notices |
₹10,000 for each failure |
|
272BB |
Failure relating to TAN requirements |
₹10,000 |
The applicable provisions under the Income-tax Act, 1961 provide for late filing fees under Section 234F, penalties for under-reporting or misreporting under Section 270A, and other compliance-related penalties mentioned above.
Taxpayers should also understand the applicable consequences of delayed return filing. Read more about the penalty for late filing of income tax return and the related compliance requirements.
Section 271DA should be distinguished from Section 271DB while reviewing cash transaction penalties. The penalty for receipt of ₹2 lakh or more in violation of Section 269ST is equal to the amount of the prohibited receipt, not ₹5,000 per day. The ₹5,000-per-day penalty relates to Section 271DB, which covers failure to provide prescribed electronic payment facilities.
Transition Between AY 2026-27 and Tax Year 2026-27
The applicability of income tax provisions depends on the relevant assessment year and tax year. AY 2026-27 relates to income earned during FY 2025-26 and continues to be governed by the Income-tax Act, 1961. The Income-tax Act, 2025, applies from Tax Year 2026-27 onwards for income earned from 1 April 2026. Taxpayers should verify the applicable law based on the nature and period of compliance before determining any fee or penalty liability.
Income Tax Penalty Chart Under the Income-tax Act, 2025
The following provisions apply to defaults occurring under the Income-tax Act, 2025 for Tax Year 2026-27 onwards. The applicable penalty depends on the nature of default and the conditions prescribed under each section.
|
Section |
Nature of Default |
Fee / Penalty |
|
427 |
Delay in furnishing TDS/TCS statements within the prescribed time |
₹200 per day, capped at the amount of tax deductible or collectible |
|
427(3) |
Failure to furnish Statement of Financial Transaction or reportable account statement within the prescribed time |
₹200 per day, subject to a maximum of ₹1,00,000 |
|
428(a) |
Failure to furnish return of income within the due date prescribed under Section 263(1) |
₹1,000 if total income does not exceed ₹5 lakh; ₹5,000 in other cases |
|
428(c) |
Failure to get accounts audited or furnish the audit report as required under Section 63 |
₹75,000 for delay up to one month; ₹1,50,000 thereafter |
|
428(d) |
Failure to furnish an accountant’s report required under Section 172 |
₹50,000 for delay up to one month; ₹1,00,000 thereafter |
|
439 |
Under-reporting of income |
50% of tax payable on under-reported income |
|
439 |
Under-reporting resulting from misreporting of income |
200% of tax payable on under-reported income |
|
448 |
Failure to deduct or pay specified TDS |
Penalty equal to tax not deducted or paid |
|
449 |
Failure to collect TCS |
Penalty equal to tax not collected |
|
450 |
Acceptance of a loan, deposit, or specified sum contrary to Section 185 |
Penalty equal to the amount accepted |
|
451 |
Receipt of money in violation of Section 186 |
Penalty equal to the amount received in contravention |
|
452 |
Failure to provide prescribed electronic payment facility under Section 187 |
₹5,000 for every day of failure |
|
453 |
Repayment of loan, deposit, or specified advance contrary to Section 188 |
Penalty equal to the amount repaid in contravention |
|
457 |
Failure to furnish prescribed transfer pricing information or documents under Section 171(2) within the prescribed time |
2% of the value of the international or specified domestic transaction for each failure |
|
461 |
Failure to furnish prescribed TDS/TCS statement or furnishing incorrect information |
₹10,000 to ₹1,00,000, subject to conditions |
|
463 |
Furnishing incorrect information in a report or certificate by an accountant, merchant banker or registered valuer |
₹10,000 for each incorrect report or certificate |
|
465(1) |
Certain failures involving questions, statements, summons or specified notices |
₹10,000 for each default |
|
466 |
Failure to comply with information requirements under Section 254 |
Penalty up to ₹25,000, subject to the conditions specified under the provision |
Sections 427 and 428 provide the applicable fees for the specified defaults under the Income-tax Act, 2025. Section 439 specifies 50% of tax on under-reported income and 200% where the under-reporting results from misreporting.
The other penalty provisions mentioned above are based on the applicable provisions of the Income-tax Act, 2025, including Sections 448, 449, 450, 451, 452, 453, 457, 461, 463, and 465.
The income tax penalty chart above covers major compliance defaults. It is not an exhaustive list of every penalty, prosecution provision or offence under the Act.
How Can Taxpayers Avoid Income Tax Penalties in India?
To reduce exposure to income tax penalties in India, taxpayers should:
- Identify whether the Income-tax Act, 1961 or Income-tax Act, 2025 applies.
- File ITR, TDS and TCS statements within applicable due dates.
- Pay tax, TDS, TCS, interest and applicable fees on time.
- Maintain books, records, and transfer pricing documents where required.
- Complete tax audit and reporting requirements within the prescribed period.
- Avoid prohibited cash acceptance, receipt, and repayment transactions.
- Respond to notices, summons, and information requests within the permitted time.
The income tax penalty sections may contain specific conditions, exceptions, and procedural requirements. Therefore, an income tax penalty chart should be used as a quick reference while the relevant provision should be checked before determining the final liability.
Can a Penalty Be Avoided for Reasonable Cause?
Reasonable-cause relief does not automatically apply to every penalty under the Income-tax Act.
Under the Income-tax Act, 1961, Section 273B provides reasonable-cause protection for specified penalties.
Under the Income-tax Act, 2025, Section 470 provides relief from specified penalties where reasonable cause is established and the prescribed conditions are satisfied, while Section 471 lays down the penalty procedure and requires a reasonable opportunity of being heard. Fees under Sections 427 and 428 should not be treated as discretionary penalties.
Income Tax Compliance Support by Ebizfiling
Ebizfiling can assist taxpayers and businesses with:
- Income tax return filing and compliance review
- TDS and TCS return filing and correction support
- Tax audit applicability and documentation
- Tax notice and compliance support
- Identifying whether a compliance falls under the Income-tax Act, 1961 or the Income-tax Act, 2025
Need assistance with income tax filing, tax compliance, or penalty-related matters? Connect with Ebizfiling’s experts for Tax Consultancy Services to understand applicable income tax provisions, compliance requirements, filing obligations, and penalty implications.
Conclusion
The income tax penalty chart for 2026 must be read with the transition between the Income-tax Act, 1961 and the Income-tax Act, 2025 in mind. AY 2026-27 continues to be governed by the Income-tax Act, 1961 where applicable, while Tax Year 2026-27 onwards follows the Income-tax Act, 2025. Understanding the applicable law, filing on time, and maintaining correct records can help taxpayers avoid many common defaults and related financial consequences.
Frequently Asked Questions
1. If the ITR for FY 2025-26 is filed after 1 April 2026, which Act will determine the penalty?
The return for FY 2025-26 relates to AY 2026-27, so it continues to be governed by the Income-tax Act, 1961 even if it is filed after 1 April 2026. Therefore, applicable late filing fees and penalties under the 1961 Act should be considered.
2. Is the ITR late filing penalty ₹5,000 for every taxpayer?
No. The ITR late filing fee, which is not treated as a penalty, depends on the taxpayer’s total income. Under Section 234F of the Income-tax Act, 1961 and Section 428 of the Income-tax Act, 2025, the applicable fee is ₹1,000 where total income does not exceed ₹5 lakh and ₹5,000 in other cases.
3. Can a taxpayer face a separate penalty even after paying the TDS statement filing fee?
Yes, depending on the circumstances. Under the Income-tax Act, 1961, Section 234E imposes a fee for delay in filing TDS/TCS statements, while Section 271H may impose a separate penalty for delayed or incorrect TDS/TCS statements. However, no penalty under Section 271H may be imposed in specified cases where the conditions prescribed under the provision are satisfied.
4. Is the penalty for receiving ₹2 lakh or more in cash ₹5,000 per day?
No. Under the Income-tax Act, 1961, Section 271DA provides a penalty equal to the amount received in violation of Section 269ST. The ₹5,000 per day penalty applies to failure to provide prescribed electronic payment facilities under Section 271DB. These provisions should be distinguished while determining the applicable penalty.
5. What happens if a tax audit report is delayed by only a few days under the Income-tax Act, 2025?
For Tax Year 2026-27 onwards, Section 428 provides the applicable fee for failure to comply with tax audit requirements. The amount depends on the duration of default, with ₹75,000 applicable where the default continues up to one month and ₹1,50,000 where the default continues for more than one month. This differs from the earlier Section 271B framework under the Income-tax Act, 1961.
6. Can a genuine calculation mistake attract the 200% misreporting penalty?
Not automatically. Section 439 distinguishes between under-reporting and misreporting of income. A 50% penalty applies to under-reported income, while the 200% penalty applies only where the under-reporting results from specified misreporting. The facts of each case must be examined before determining the applicable penalty.
7. Can a Chartered Accountant or registered valuer be penalised for an incorrect certificate?
Yes. Under Section 463 of the Income-tax Act, 2025, an accountant, merchant banker or registered valuer may be liable to a penalty of ₹10,000 for each report or certificate containing incorrect information, subject to the conditions prescribed under the provision. This is one of the professional compliance defaults covered under income tax penalty sections.
8. Can the Income-tax Department impose a penalty without giving the taxpayer an opportunity to respond?
Generally, no. Section 471 of the Income-tax Act, 2025 requires the taxpayer to be given a reasonable opportunity of being heard before passing a penalty order. Section 470 also provides relief for specified penalties where reasonable cause is established. The applicable procedure depends on the relevant provision and facts of the case.
9. Can Ebizfiling help if an ITR or TDS return has already been filed late?
Yes. Ebizfiling can assist with reviewing applicable penalties under the Income-tax Act, identifying relevant late filing fees, preparing or correcting eligible ITR or TDS filings, and supporting related compliance requirements. The actual fee, penalty, or relief depends on the applicable law and facts of the case.
10. Can Ebizfiling help identify which penalty section applies to an income tax notice?
Yes. Ebizfiling can assist in reviewing income tax notices, identifying applicable penalty provisions, checking whether the Income-tax Act, 1961 or the Income-tax Act, 2025 applies, and supporting the preparation of appropriate responses. The final applicability depends on the relevant statutory provision and facts of the case.
File Income Tax Returns
File your ITR with EbizFiling at INR 1199/- only.
About Ebizfiling -
Reviews
Lakshman Rajpurohit
28 May 2017We are looking for company who provides registration and process for SSI certificate. We contact ebizfiling and they have done job for us in a smooth way. we really appreciate their service and quick turn around time. Special Thanks to team of ebizfiling India pvt. ltd.
Harshit Gamit
19 Apr 2018My GST process was made easier with Ebizfiling. I really appreciate the hard work by your team. Keep up the same in the future. Good Luck!
Aditi Doshi
29 Mar 2018They manage Accounting and Book-keeping for my company. I must say the team is really doing a good job.
September 7, 2026 By Steffy A
Health Insurance Deduction Under Section 126: Rules & Limits Introduction Health insurance protects families from rising medical costs and can also provide a tax benefit when the legal conditions are satisfied. Section 126 of the Income Tax Act, 2025 provides […]
August 29, 2026 By Steffy A
OPC Compliance Calendar September 2026: Key Due Dates Introduction The OPC Compliance Calendar September 2026 lists the major tax, GST, labour law, and ROC obligations that One Person Companies may need to complete during the month. September includes important compliances […]
August 29, 2026 By Steffy A
TDS and TCS Compliance Calendar September 2026: Key Deadlines Introduction The TDS and TCS Compliance Calendar September 2026 helps deductors, collectors, government offices, property buyers and eligible individuals or HUFs identify the forms applicable to them. Reviewing these requirements in […]