Section 271K-Penalty on charitable institution

A new section 271K insert by the finance bill 2020 which impose the penalty on charitable institution.

Summary of section 271K of the Income Tax Act: –

• This section is applicable from 01-06-2020.
• This section is applicable on charitable institution who fails to provide details of donors within prescribed time or fails to provide to donor certificate of amount of donation.
• Penalty amount shall not be less than Rs. 10,000/- but may extend to Rs. 1,00,000/-.

Extract of Section ‘271K of the Income Tax Act

After section 271J of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2020, namely: ––

Section “271K of the Income Tax Act

Without prejudice to the provisions of this Act, the Assessing Officer may direct that a sum not less than ten thousand rupees but which may extend to one lakh rupees shall be paid by way of penalty by––

• the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia), of sub-section (1) of section 35, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or
• the institution or fund, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section.”.