Penalty for providing inaccurate statement of financial transaction or reportable account- Section 271FAA

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Penalty For Providing Inaccurate Statement Of Financial Transaction or Reportable Account - Section 271FAA

The provisions of section 271FAA of the Income Tax Act applies in case the specified person furnishes an inaccurate statement of the financial transactions / reportable account as prescribed under section 285BA of the Income Tax Act.

The provisions of section 271FAA of the Income Tax Act applies in case the specified person furnishes an inaccurate statement of the financial transactions / reportable account as prescribed under section 285BA of the Income Tax Act.
The provision of section 285BA mandates the specified person to furnish the statement of financial transactions in Form 61A. It should be noted that two penalty sections cover different types of default relating to section 285BA which are summarized hereunder for ready reference –
Section 271FA
This section levies penalty in case the specified person fails to furnish the statement of the financial transaction / reportable accounts.
Section 271FAA
Furnishing of inaccurate particulars in the statement of financial transaction or reportable account will attract penalty under section 271FAA.This section levies penalties in case of submitting an inaccurate statement of the financial transaction / reportable account.
The penalty provisions of section 271FAA of the Income Tax Act, 1961 and the amount of penalty payable thereon are explained in the current article.
Section 271FAA. If a person referred to in clause (k) of 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.

Amount of penalty payable under section 271FAA

In case the person files an inaccurate statement of the financial transactions, as stated above, then the person would be liable to pay the penalty amounting to INR 50,000.

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