Penalty for Furnishing Inaccurate Statement of Financial Transaction or Reportable Account
Nature of Default
The penalty may be imposed if a person provides inaccurate information in the SFT or Reportable Account under Section 285BA. Up to 30th September, 2024, the penalty may be levied if the:
• Inaccuracy is due to failure to comply with due diligence or deliberate action.
• Inaccuracy due to false or inaccurate information provided by the holder of reportable accounts.
• Person knows the inaccuracy when furnishing the statement, but doesn’t inform the tax authorities, or discovers the inaccuracy after furnishing the statement, but fails to inform and furnish correct information within 10 days.
From 1 October 2024, the penalty applies only for failure to furnish correct information within 10 days, inaccuracy due to failure of due diligence, or false or inaccurate information provided by the holder of reportable accounts.
Quantum of Penalty
• Penalty of Rs. 50,000 may be imposed by the Director or Joint Director of Income-tax (Intelligence and Criminal Investigation).
• An additional penalty of Rs. 5,000 per inaccurate reportable account is imposed on reporting financial institutions if inaccuracies are due to false information submitted by holders.
• Penalty shall not be levied if the assessee proves reasonable cause for the failure.