A look at most common income tax penalties as ITR filing deadline approaches

With the July 31 deadline for filing income tax returns (ITR) looming, taxpayers face potential penalties and complications if they fail to comply. The Income Tax Department has outlined various consequences for defaults, including financial liabilities such as fees and interest.

Key penalties include a late filing fee of up to ₹5,000 under Section 234F, which is ₹1,000 if total income doesn't exceed ₹5 lakh. A delayed revised return can incur a Section 234-I penalty of ₹1,000 or ₹5,000. For under-reported or misreported income, Section 270A allows penalties ranging from 50% to 200% of the tax payable.

Further penalties exist for specific violations. Receiving ₹2 lakh or more in cash breaches Sections 269ST and 271DA, potentially resulting in a penalty equal to the amount received. Failure to pay self-assessment tax can lead to penalties up to the outstanding tax amount under Sections 140A and 221.

The Income Tax Department urges taxpayers to file early to avoid penalties, reduce stress, and allow time for error correction. The department noted on its X handle that over 30 million ITRs have already been filed for the assessment year 2026-27, with more than 1.5 million filed the previous day, emphasizing the need to avoid the last-minute rush. Timely and accurate filing is crucial for tax compliance.

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3 Crore+ ITRs have already been filed for AY 2026-27, with 15 lakh+ ITRs filed yesterday alone! Don't wait for the deadline rush.