Wrong ITR Entry? 1 Mistake Cost ₹6.63 Crore
A salaried employee misreported his job perquisite as capital gains in his ITR and got slapped with a ₹6.63 crore penalty. ITAT Mumbai gave him relief, but the case is a wake-up call for every salaried taxpayer who fills ITR without understanding income heads.
₹6.63 crore penalty = roughly 110 years of an average salaried Indian's income gone in one ITR error.
One wrong ITR box can cost you crores in penalties
Key Takeaways
Check your Form 16 carefully — perquisites are listed in Part B; ensure they appear under 'Salary' head in your ITR, not any other income category.
If you received ESOPs, RSUs, or any employer benefit this year, consult a CA before filing — these have specific rules on how and when they are taxed.
Use the correct ITR form — salaried employees with perquisites or stock options should typically file ITR-2, not ITR-1 (Sahaj), to avoid misreporting errors.
A salaried employee misreported his job perquisite as capital gains in his ITR and got slapped with a ₹6.63 crore penalty. ITAT Mumbai gave him relief, but the case is a wake-up call for every salaried taxpayer who fills ITR without understanding income heads.
Here's what happened: A salaried employee mistakenly declared a job-related perquisite under 'capital gains' instead of 'salary' in his Income Tax Return, triggering a massive ₹6.63 crore penalty from the tax department.. The Income Tax Appellate Tribunal (ITAT) Mumbai granted relief, noting that salaried individuals often lack expertise in complex tax classification rules and the error was not intentional concealment.. Perquisites — like ESOPs, rent-free accommodation, or company car benefits — must be reported under 'Income from Salary', not capital gains; misclassification can change your tax slab and invite scrutiny..
What you should do: Check your Form 16 carefully — perquisites are listed in Part B; ensure they appear under 'Salary' head in your ITR, not any other income category.. If you received ESOPs, RSUs, or any employer benefit this year, consult a CA before filing — these have specific rules on how and when they are taxed.. Use the correct ITR form — salaried employees with perquisites or stock options should typically file ITR-2, not ITR-1 (Sahaj), to avoid misreporting errors..
ITAT relief is not guaranteed for everyone — courts weigh intent and history. Filing a revised ITR before the deadline is far cheaper than fighting a penalty notice later.
For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.
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- [1]“Reporting perquisite as capital gain in ITR by mistake resulted in Rs 6.63 crore penalty for a salaried employee; ITAT Mumbai granted him relief for this reason” Wealth-Economic Times · 31 Jul 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.