Section 271GA Penalty for failure in furnishing the information / document in Form 49D as required under section 285A

The provisions of section 285A of the Income Tax Act mandates the specified Indian concern to provide the particular information / document in the specified Form 49D. In case the Indian concern fails to furnish the required information / document in Form 49D within the prescribed time limit, then the Income Tax Authority may direct the Indian concern to pay the penalty under provisions of section 271GA of the Income Tax Act.

Thus, the penalty provisions of section 271GA are applicable only to the specified Indian concern in case of failure in satisfying the reporting requirement as per provisions of section 285A. The said penalty provisions of section 271GA are taken up and explained in the present article.

Understanding provisions of section 271GA 

The provisions of section 271GA of the Income Tax Act states as under –

  • The specified Indian concern is required to furnish information / documents as per provisions of section 285A.
  • In case such specified Indian concern fails to furnish the required information / documents, the Income Tax Authority may direct such Indian concern to pay the penalty under section 271GA.

In simple terms, if the Indian concern fails to furnish the information / documents as required under section 285A within the prescribed time limit, then the concern would be penalized under section 271GA.

Requirement under section 285A of the Income Tax Act

The provisions of section 285A mandate the Indian concern to furnish information / documents in case the following conditions are satisfied –

1. Shares or interest in a foreign company / entity derives substantial value (whether directly or indirectly) from assets located in India [as referred in Explanation 5 to section 9 (1) (i)]; and

2. Such foreign company / entity holds (whether directly or indirectly) such assets in India through the Indian concern or in such Indian concern.

In case both the above conditions are satisfied, the Indian concern needs to furnish the information / document in Form 49D within the prescribed time limit. The Indian concern is required to furnish such information for the purpose of determination of any income accruing / arising in India under section 9 (1) (i) of the Income Tax Act.

Amount of penalty payable under section 271GA of Income Tax Act

The penalty amount payable under section 271GA is tabulated here under –

Particulars Amount of penalty
In case the transaction had the effect (whether directly or indirectly) of transferring the right of management / control in relation to the Indian Concern. An amount equal to 2% of the value of the transaction.
In any other case. INR 5,00,000

It is pertinent to mention here that in case the defaulter proves the reasonable cause for failure, then as per provisions of section 273B of the Income Tax Act, no penalty can be imposed on the specified Indian concern under section 271GA.

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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