The provisions of section 271FAA of the Income Tax Act applies in case the specified person furnishes inaccurate statement of the financial transactions / reportable account as prescribed under section 285BA of the Income Tax Act.

The provision of section 285BA mandates the specified person to furnish the statement of financial transaction in Form 61A. It should be noted that two penalty sections cover different types of default relating to section 285BA which are summarized hereunder for ready reference –

Section Type of default
Section 271FA This section levies penalty in case the specified person fails to furnish the statement of the financial transaction / reportable accounts.
Section 271FAA This section levies penalty in case of submitting an inaccurate statement of the financial transaction / reportable account.

The penalty provisions of section 271FAA of the Income Tax Act, 1961 and the amount of penalty payable thereon is explained in the current article.

penalty

Provisions of section 271FAA of the Income Tax Act

Provision of section 285BA mandates the specified categories of person to furnish the statement of the financial transaction. The penalty provisions of section 271FAA apply under the following circumstances –

1. The person fails to comply with the due diligence requirement given under section 285BA (7) or is deliberate on the part of the person.

2. The person was aware about the inaccuracy at the time of filing of the statement of the financial transactions. However, the person fails to inform the income tax authority about the said inaccuracy.

3. The person realizes the inaccuracy after filing of the statement of the financial transactions. However, the person fails to inform and furnish correct statement / information within the time specified under section 285BA (6) (i.e. within a period of 10 days).

Amount of penalty payable under section 271FAA

In case the person files an inaccurate statement of the financial transactions, as stated above, then the person would be liable to pay the penalty amounting to INR 50,000.

Read Also:-

S. No. Title
1 Section 272BB Penalty for failure to comply section 203A provisions
2 Section 272B Penalty for failure to comply with provisions of PAN
3 Section 272AA Penalty for failure in complying with provisions of section 133B
4 Section 272A Penalty for failure to answer questions or furnish information / returns/ statements or allow inspections etc
5 Section 271J Penalty on professionals for furnishing incorrect information in reports / certificates
6 Section 271I Penalty for failure in furnishing Form 15CA & Form 15CB
7 Section 271H Penalty for late filing/non-filing of TDS or TCS return
8 Penalty for failure in furnishing report or furnishing inaccurate report under section 286 – Section 271GB
9 Section 271GA Penalty for failure in furnishing the information / document in Form 49D as required under section 285A
10 Section 271G Penalty for failure to furnish information / document as per provisions of section 92D
11 Section 271FB Penalty for default in furnishing return of fringe benefits
12 Section 271FAB Penalty for failure to furnish statement / information / document by an eligible investment fund
13 Penalty for providing inaccurate statement of financial transaction or reportable account- Section 271FAA
14 Section 271FA Penalty for failure in furnishing statement of financial transactions or reportable account
15 Section 271E Penalty for contravening provisions of section 269T
16 Section 271DB | Penalty for contravening provisions of section 269SU
17 Section 271DA Penalty for contravening provisions of section 269ST
18 Section 271CA Penalty for failure to collect tax at source (TCS)
19 Section 271D Penalty for contravening provisions of section 269SS
20 Section 271C Penalty for failure / non-deduction / non-payment of TDS
21 TDS Rate Chart for AY 2020-21 and AY 2021-22
22 Section 271BA Penalty for failure to furnish section 92E report
23 Section 271B Penalty for failure to get accounts audited
24 Section 271AAC Penalty in respect of certain specified income
25 Section 271AA Penalty for failure to maintain Transfer Pricing documents
26 Section 271A Penalty for failure to keep / maintain or retain books of accounts, documents
27 Section 270A(1) Penalty for under-reporting & misreporting of income
28 Section 269SU Acceptance of payment through electronic modes
29 Section 234F Late fees for default in filing of income tax return
30 Section 234E Late Fee for default in filing of TDS / TCS returns
31 Section 158BFA(2) – Penalty on undisclosed income for block period
32 Section 140A(3) Penalty for non-payment of self-assessment tax

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