Latest Penal Provisions â€“ Penalty by slabs on undisclosed income

Direct Taxes (including International Taxation) | By ALOK PATNIA | Last updated on Oct 5, 2017

The newly-introduced penal provision (Penalty on undisclosed income as per sec 271AAB) has been introduced by our Honâ€™ble Finance Minister Shri Pranab Mukherjee in his Finance Bill-2012. The intention behind this can be well explained by the immortal words of Shakespeareâ€™s. â€œI must be cruel only to be kind.â€ Â The insertion of new section 271AAB is applicable on search which is initiated on or after 1^st July, 2012. The attraction of Penalty as per sec 271AAB can be well understood by the following slab given below:

*TIME OF DISCLOSURE OF UNDISCLOSED INCOME BY THE ASSESSEE*	*RATE OF PENALTY*
At any time during the course of Search	10% of the un-disclosed income.
Between any time from the date of termination of search to date of Return Filing	20% of the un-disclosed income.
At any time after the Return Filing Date	Min 30% – Max 90% of the un-disclosed income as per the discretion of Income-tax Officer.

Other Relevant Points

Undisclosed income does not only mean the disclosure of income, but the assessee is also required to admit & substantiate the manner in which such income is derived.

Also, the assessee is required to pay tax along with the interest levieble thereon.

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*TIME OF DISCLOSURE OF UNDISCLOSED INCOME BY THE ASSESSEE*	*RATE OF PENALTY*
At any time during the course of Search	10% of the un-disclosed income.
Between any time from the date of termination of search to date of Return Filing	20% of the un-disclosed income.
At any time after the Return Filing Date	Min 30% – Max 90% of the un-disclosed income as per the discretion of Income-tax Officer.

Other Relevant Points

Undisclosed income does not only mean the disclosure of income, but the assessee is also required to admit & substantiate the manner in which such income is derived.

Also, the assessee is required to pay tax along with the interest levieble thereon.

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