New Delhi, April 27 -- Reporting incorrect income in an income tax return can attract penalties under the Income Tax Act, 2025, with misreporting of income liable for a penalty of up to 200% of the tax payable. The fine amount depends on whether the error is classified as under-reporting or misreporting.

Under-reporting of income occurs when a taxpayer declares a lower income than what the tax authorities assess, typically due to omissions, incorrect claims, or calculation errors. In such cases, a penalty of 50% of the tax payable on such income is applicable. Misreporting, in contrast, involves deliberate actions to conceal or distort income details, such as hiding income, claiming bogus expenses, or failing to record transactions.

Bot...