Every assessee is required to comply with certain obligations imposed by the Act e.g. filing of return of income within a specified date, payment of advance tax within specified dates and installments, etc. Failure to comply with such obligations entails interest, penalties and prosecutions. The Department is also liable to pay interest to the assessee in certain cases. Provisions regulating levy of interest and impose of penalties and prosecutions are discussed.
Interest and penalty for failure to deduct or pay tax at source [Sec. 201(1A) & 221]:
If any person responsible for deducting tax at source under sections 192 to 195 does not deduct the whole or any part of the tax or after deducting such tax fails to pay the same as required by or under this Act, he or it shall be liable to pay simple interest @ 1% per month pr a part of a month (@ 12% p.a. before April 1, 2008) on the amount of such tax from the date on which such tax is deductible to the date on which such tax is actually paid and such interest shall be paid before furnishing the quarterly statement for each quarter in accordance with the provisions of section 200(3) [Sec. 201 (1A)].
For default in payment of tax, penalty shall be levied as per section 221. However, no penalty shall be charged unless the Assessing Officer is satisfied that person has failed to deduct and pay the tax without good and sufficient reasons.
Interest for defaults in furnishing return of income [Sec. 234A]:
Where the return of income for any assessment year is furnished by the assessee after the due date or is not furnished, the assessee shall be liable to pay interest under section 234A (1) as under:
| Cases | Rate of interest | Period for which such interest is chargeable | Amount on which such interest is chargeable |
| Where the return is furnished after the due rate
Where no returns has been furnished |
Simple interest @ 1% for every month or a part of month
Simple interest @ 1% for every month or part of a month |
Such interest is charge- able for the period commencing on the date following the due date and the ending on the date of furnishing the return
Such interest is charge-able for the period com- mencing on the date following the due date and ending on the date of completion of the assessment under section 144 |
Such interest is charge- able on the amount of tax on the total income has reduced by the amount of advance tax, if any, paid and any tax deducted or collected at source, any tax relief under section 90, 90A and 91 and MAT credit number section 115JAA
Such interest is charge- able on the amount of tax on the total income as reduced by the amount of advance tax, if any, paid and any tax deducted or collected at source, any tax relief under section 90,90A and MAT credit under section 115JAA |
User Tax Forum to ask your queries
Related posts:
- Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted
- Delay in TDS Remittance Even a Day- Interest up to 3%!
- Simplified the provisions of interest payable by the assessee on default of payment of income tax u/s 234A
- Penalty Provisions Under Service Tax
- Income from Undisclosed Sources Chargeable to Tax
Sponsored Links
Comments on this entry are closed.