Amended and updated notes on section 271FAA of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Penalty for furnishing inaccurate statement of financial transaction or reportable account.
Chapter XXI (Sections 270A to 275) of the Income Tax Act 1961 deals with the provisions related to penalties imposable. Section 271FAA of IT Act 1961 provides for Penalty for furnishing inaccurate statement of financial transaction or reportable account.
Recently, we have discussed in detail section 271FA (Penalty for failure to furnish statement of financial transaction or reportable account) of IT Act 1961. Today, we learn the provisions of section 271FAA of Income-tax Act 1961. The amended provision of section 271FAA is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 271FAA of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-271FAA: Penalty for furnishing inaccurate statement of financial transaction or reportable account
If a person referred to in sub-section (1) of section 285BA, who is required to furnish a statement under that section, provides inaccurate information in the statement, and where—
- (a) the inaccuracy is due to a failure to comply with the due diligence requirement prescribed under sub-section (7) of section 285BA or is deliberate on the part of that person; or
- (b) the person knows of the inaccuracy at the time of furnishing the statement of financial transaction or reportable account, but does not inform the prescribed income-tax authority or such other authority or agency; or
- (c) the person discovers the inaccuracy after the statement of financial transaction or reportable account is furnished and fails to inform and furnish correct information within the time specified under sub-section (6) of section 285BA,
then, the prescribed income-tax authority may direct that such person shall pay, by way of penalty, a sum of fifty thousand rupees.