Penalty for misreporting: take immunity or appeal?

Since 1 March 2026 you can buy immunity even from a misreporting penalty. Five answers give you whether it is open, what it really costs against the appeal, and the dates.

1Enter the order
2Compare the routes
3Print the note

Your order

5 answers
What does the penalty notice charge?
Leave it equal to the total if the notice doesn't split it.
From the order's penalty working, or the penalty show-cause. It is the tax on the addition, not the whole demand.
Do you dispute the addition itself?
Immunity means giving up this dispute too.
Has a prosecution been started for this year?
A show-cause asking why prosecution should not start counts.
Order detailsType of order, year, pay-by date, demand, a pending correction
Type of order
Default: scrutiny assessment, the most common order.
Used on the note only. Default: the latest year usually in scrutiny.
Usually 30 days from when you got it — change it if your notice says otherwise. Blank = 30 days.
Have you paid the demand (and any extra tax) already?
Default: no.
Printed on the note only; leave blank if you don't have it.
Is a TDS/TCS credit correction pending that would cut the demand?
Default: no.
Your view of the appealOptional: your own estimate
Leave blank and we show only the break-even. We never guess this for you.
Client and letterheadNeeded to print; your firm is remembered on this device
Blank = the letterhead prints empty, for your own stationery.
Blank = a line to fill by hand.
Blank = three ruled lines for you to write by hand. A long advice moves to a second page.
How this works

What changed on 1 March 2026. Immunity now covers misreporting at 100% of the tax, and it shields you from prosecution as well as the penalty.

Why the disputed part counts. Immunity means no appeal, so any part of the addition you meant to fight is tax you pay for good.

The break-even. Immunity's cost divided by the penalty. If you think the penalty is likelier than that to survive, immunity is cheaper; time value and interest are ignored.

The notice doesn't name the limb. The Delhi High Court (Schneider Electric, 2022) set aside a refusal of immunity where the limb wasn't specified, and tribunals delete such penalties. It is the appeal's strongest ground.Verify with CA

Dates. Apply within one month after the month you received the order; pay by the demand date; file no appeal (30 days).

If immunity is refused. On our reading, the time the application was pending doesn't count against your appeal period.Verify with CA

Orders from tax year 2026-27. Under the new Income-tax Act 2025 this becomes Section 440 and Form 161, with 120% for unexplained income.

What this page doesn't do.

  • Draft Form 68, the appeal or a reply.
  • Compute the tax on under-reported income, or interest.
  • Predict the appeal: it compares your own estimate with the break-even.
  • Decide orders received before 1 March 2026.
  • Handle other penalties (s.271AAB, s.271AAC and the like).

Your answer

Immunity costs you
—
beyond paying the demand
Penalty at risk
—
if you appeal and lose
Break-even
—
chance the penalty survives appeal

The two routes, side by side

ImmunityAppeal

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