| Question And Answer | |
|---|---|
| Subject: | Updated return |
| Category: | Income-Tax |
| Querist: | CA GOVIND AGRAWAL |
| Answered by: | Law Intern |
| Tags: | misreporting of income, Section 270A, under reporting |
| Date: | June 25, 2025 |
Whether in case of donation to political party if the case is taken for assessment or reassessment & the A.O. decides to disallow the donation made & initiates penalty u/s 270A whether the same will be leviable for under-reporting /misreporting i.e. 50% of tax payable or 200% of tax payable.
Whether it will be the amount of tax & surcharge only or it will include the amount of interest.
It depends on why the AO is making the disallowance of the political donation. If the disallowance is due to missing documentation, mistaken belief in eligibility or for bona fide errors, it is likely to be treated as under-reporting attracting 50% penalty.
If the disallowance results from deliberate misrepresentation (e.g., falsified receipt, claiming a non-existent donation), it qualifies as misreporting, leading to a 200% penalty.
The penalty is calculated on the tax payable (including income tax, surcharge, and cess) on the under-reported income & not on interest.