Sauce For The Goose Isn’t Sauce For The Gander

wealthymattersObviously we all agree that money now is better than the same money later.Hence,the practice of using discount rates.The government has an interesting take on discount rates.

There are various provisions in the Income Tax Act for charging of interest if a taxpayer fails to pay tax on time. Similarly, there are provisions for giving interest on a refund to taxpayers.

When a taxpayer defaults in making payment of tax, interest or penalty, he has to pay interest @ 12% p.a., (in some cases even @18% p.a.), In contrast, I-T the department pays interest only at 6% p.a. on refunds issued. The rate remains 6% even if the department delays the refund. Moreover, if there is default in paying tax, in addition to interest, the tax payer is further liable for penalty u/s 221 @ 12%. However, there is no corresponding liability on the department if it defaults in issuing refund in time to the taxpayer. Read more of this post

%d bloggers like this: