Penalty & Interest

1. Penalty for late submission of annual return of income

   Every person who is required to submit a return and who fails to do so, shall be liable to pay a penalty of Rs 2,000 per month until the time the return is submitted, up to a maximum of Rs 20,000. However, where the person is a small enterprise having an annual turnover not exceeding 10 million rupees or an individual who is not in business, the maximum penalty is Rs 5,000.

2. Penalty for late payment of tax

   In case of late payment, a penalty of 2.5 % of the amount of tax payable is applicable. However, where the person is a small enterprise having an annual turnover not exceeding 10 million rupees or an individual who is not in business, the rate of penalty is 1 %.

3. Interest for late payment of tax

   In case of late payment, an interest of 0.25 % on the balance of tax payable is applicable for each month or part of the month during which the tax remains unpaid after the due date.