Section 271AAE Imposes Penalties on Funds, Trusts Misapplying Income; 200% Penalty for Repeat Offenders

Section 271AAE, effective from April 1, 2023, addresses penalties for certain funds, trusts, or institutions violating specific income tax provisions. If these entities, covered under Section 10(23) or Section 11, improperly apply income or property for the benefit of individuals specified in Section 13(3), penalties apply. For a first-time violation, the penalty equals the income amount misapplied. For repeated violations, the penalty is 200% of the misapplied income. This section operates in addition to any other applicable penalties under Chapter XXI of the Income Tax Act.