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Penalty for default in making payment of Self Assessment Tax [Section 221(1)]

As per section 140A(1) any tax due (after allowing credit for TDS, advance tax, etc.) along with interest under section 234A, 234B and 234C (if any) should be paid before¬†filing the return of income. Tax paid as per section 140A(1) is called ‘self assessment tax’.

As per section 140A(3), if a person fails to pay either wholly or partly self assessment tax or interest, then he will be treated as assessee in default in respect of unpaid amount. As per section 221(1), if a taxpayer is treated as an assessee in default, then he shall be held liable to pay penalty of such amount as the Assessing Officer may impose and in the case of a continuing default, such further amount or amounts as the assessing officer may, from time to time, direct. However, the total amount of penalty cannot exceed the amount of tax in arrears.

'PENALTIES' Under Income Tax Act. 1961

Before charging penalty under section 221(1), the tax authority shall give the taxpayer a reasonable opportunity of being heard. No penalty is levied if the taxpayer proves to the satisfaction of the tax authorities that the default was for good and sufficient reason.

Note: An assessee shall not cease to be liable to any penalty under section 221(1) merely by reason of the fact that he paid the tax before the levy of such penalty.

Related Topics...Penalty

[Section 270AA] : Immunity from Imposition of Penalty and Initiation of Proceedings under Section 276C or 276CC
Penalties for different Defaults under Income Tax Act.
Penalty for default in making payment of Self Assessment Tax [Section 221(1)]
Penalty For Under-Reporting And Mis-Reporting Of Income (Section 270A)
'PENALTIES' Under Income Tax Act. 1961.
Power of Commissioner to Grant Immunity from Penalty [Section 273AA]
Power to Reduce or Waive Penalty (Section 273A)
Types of Penalties imposed under Income Tax Act. 1961
 
 
 
 
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