Answer

1. F

   Facts

   Penalty under Sec 270A is based on the tax payable on the under-reported income, computed as if that income were your total income in some cases, and in others as the difference in tax. The rate is 50% for under-reporting and 200% for misreporting.

2. P

   Provisions and law

   • Sec 270A (now Sec 439)Penalty of 50% of tax on under-reported income, or 200% where under-reporting is due to misreporting
3. A

   Analysis

   For an individual already in the 30% slab, ₹6,00,000 of extra income means tax of about ₹1,87,200 including 4% cess. Under-reporting penalty at 50% is about ₹93,600; misreporting at 200% is about ₹3,74,400. If part of the addition is a bona fide claim with full disclosure, that part can be excluded. Do the computation per addition, since some may be defendable and others not.

4. C

   Conclusion

   1. 1List each addition in the order with its amount
   2. 2Compute the tax effect of each at your marginal rate with cess
   3. 3Apply 50% or 200% as charged
   4. 4Mark which additions may fall under the exclusions

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.