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Herebelow is the chart showing simple interest leviable on the amount of tax in case of delayed payment of tax under Punjab VAT Act, 2005 under section 32 and section 27(7).It should be noted that such simple interest is not a penal interest and is payable without any requirement of show cause notice and has to be paid along with the delayed payment of tax.
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Nature of Delay
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Section
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Rate of simple Interest
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Failure to pay tax by due date of payment
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32(1)
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0.5% of tax due per month from the due date till the actual date of payment
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Failure to deposit TDS by due date of payment
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27(7)
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1.5% of amount deductible per month from the due date till the actual date of payment
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Rectification of any error or omission in return after its furnishing, which results in higher amount of tax due than the original Return
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32(2)
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1.5% of the additional tax payable per month from the due date till the actual date of payment
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Failure to declare amount of tax in the Return
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32(3)
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1.5% of the tax not declared per month from the due date till the actual date of payment.
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Failure to pay amount of tax or penalty on demand issued by department
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32(4)
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1.5% of amount of tax or penalty due per month from the date of expiry of notice period or 30 days
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Payment of recovery amount after vacation of stay order on recovery of any tax or penalty
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32(4)
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1.5% of amount ultimately found to be due per month from the date the tax and penalty first became due
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(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amit@amitbajajadvocate.com, M +919815243335)
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