Section 270A - Penalty for under-reporting and misreporting of income.

Penalty up to 200% for under-reporting income under Income Tax Act, with exemptions for bona fide cases under Section 270A

Any person found to have under-reported income during proceedings under the Income Tax Act is liable to pay a penalty in addition to tax on the under-reported income. Under-reporting includes cases where assessed income exceeds the income declared in the return or prior assessments, or where losses are reduced or converted into income. The penalty is generally 50% of the tax payable on the under-reported income, but if misreporting is involved-such as misrepresentation, suppression of facts, false entries, or failure to report international transactions-the penalty increases to 200%. Certain bona fide explanations and properly documented estimates are exempt from penalty. The tax on under-reported income is calculated based on specific formulas depending on the assessment history. Penalties are imposed by the Assessing Officer or designated appellate authorities through written orders, and no penalty is imposed on amounts previously penalized for the same or other assessment years.