Five income tax charges and penalties every taxpayer should know before filing ITR for AY 2026-27

Missing the filing deadline, reporting incorrect income or failing to follow other tax rules can lead to extra costs. Taxpayers may have to pay late fees, interest or even penalties depending on the nature of the default. In some cases, the penalty can go up to 200% of the tax payable on the income that was wrongly reported.

For Financial Year 2025-26 (AY 2026-27), the income tax department has listed the consequences for various tax defaults. From filing your income tax return after the due date to under-reporting income or receiving large cash payments in violation of the rules, taxpayers could face penalties ranging from ₹1,000 to the full amount involved, depending on the nature of the default.

1. Late ITR filing (Section 234F)

• Up to ₹5,000 if you file your return is filed after the due date.

• If your total income is less than ₹5 lakh, the fee is limited to ₹1,000.

2. Late revised return (Section 234-I)

You must pay the following if you file a revised return after 9 months but before 12 months from the end of the relevant assessment year:

• ₹1,000 if income is up to ₹5 lakh.

• ₹5,000 in other cases.

3. Under-reporting or misreporting income (Section 270A)

50% of the tax penalty for under-reported income. 200% of the tax if it turns out that the income was misreported.

4. Receiving ₹2 lakh or more in cash (Section 269ST/271DA)

If the cash transaction limit is exceeded, a penalty equal to the amount received may be levied.

5. Failure to pay self-assessment tax (Sections 140A & 221)

The Assessing Officer may impose a penalty up to the amount of tax in arrears for failure to pay self-assessment tax or other tax dues.

ITR filing last date

More than 3 crore ITRs have already been filed for Assessment Year (AY) 2026-27, the Income Tax Department said on July 22, urging taxpayers not to wait until the last moment to file their returns. Return filing has gathered pace as the July 31 deadline approaches for salaried individuals and other taxpayers who are not required to get their accounts audited.

In a post on X, the department said, "3 Crore+ ITRs have already been filed for A.Y. 2026-27, with 15 Lakh+ ITRs filed yesterday alone! Don't wait for the deadline rush."