Ids penalty code

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18 November 2016 While making online payment of IDS tax in challan 286, there is on Penalty Code 11c or n11c applies. Which Code is to be selected for an Individual tax payer

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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18 November 2016 Code 11C is for Penalty Order u/s 271(1) (c) and N11C is for Order Other than u/s 271(1) (c). you should choose11C

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19 November 2016 Since IDS is a Voluntary Disclosure, how penalty u/s 271 (1) (c) applies. Advice Code N11C is correct

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 In the context of the Income Declaration Scheme (IDS) and the corresponding payment process, selecting the correct penalty code is crucial to ensure proper compliance and correct payment processing. Here’s a detailed explanation on how to handle this:

### **Income Declaration Scheme (IDS) and Penalty Codes**

#### **1. **Understanding IDS and Penalties:**

**Income Declaration Scheme (IDS):**
- **Purpose:** IDS was a scheme introduced by the Government of India to allow individuals to disclose undisclosed income and pay tax along with a penalty. It was part of the effort to bring black money into the mainstream economy.
- **Voluntary Disclosure:** Since IDS is a voluntary disclosure scheme, it offers a way to regularize previously undisclosed income.

**Penalty Under Section 271(1)(c):**
- **Provision:** Section 271(1)(c) deals with penalties for concealment of income or furnishing inaccurate particulars of income. This is not directly applicable to IDS since IDS is a scheme for voluntary disclosure, and its penalty is predefined under the scheme itself.

#### **2. **Penalty Code Selection in Challan 286:**

When making an online payment of IDS tax using Challan 286, you need to select the correct penalty code. The penalty codes are used for different types of tax and penalty payments. For IDS, the penalty code selection should reflect the nature of the payment as per the scheme’s requirements.

**Codes in Challan 286:**
- **11C:** This code is used for penalties under various sections of the Income Tax Act, including penalties for concealment of income, etc.
- **N11C:** This code is used specifically for "No Penalty" cases or where there is no penalty under section 271(1)(c) due to the nature of the scheme (e.g., IDS).

#### **3. **Code N11C for IDS Payments:**

**For IDS Payments:**
- **Code N11C:** This code is correct for payments related to IDS because IDS is a scheme with its own set of rules and penalties. The code reflects the nature of the IDS payment, which is distinct from the usual penalty provisions under section 271(1)(c).

### **Steps for Correct Payment:**

1. **Select Challan 286:**
- Go to the online payment portal for income tax payments and select Challan 286.

2. **Choose the Appropriate Code:**
- **For IDS Tax Payments:** Use **Code N11C**. This reflects the penalty payment for the IDS scheme, which is different from the standard penalties under section 271(1)(c).

3. **Complete the Payment Details:**
- Fill in your details, such as PAN, address, and the amount to be paid, ensuring accuracy.

4. **Verify and Submit:**
- Review all the details and submit the payment.

5. **Receipt:**
- Ensure you obtain a receipt or confirmation of payment for your records.

### **Summary:**

For making an online payment of IDS tax using Challan 286, you should select **Code N11C**. This is because the Income Declaration Scheme (IDS) has its specific provisions and penalties, which are different from the usual penalties under section 271(1)(c) of the Income Tax Act. Code N11C correctly reflects the nature of the IDS payment, ensuring proper processing and compliance with the scheme’s requirements.