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Interest & Penalty on delay in deposit of DVAT (VAT)

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This query is : Resolved

( Querist )
06 June 2009

what is the interest & penalty on delay of deposit of DVAT? I know that Rs. 100/- per day payable on late filing of DVAT return but Is there any penalty on tax payment also?

Ram Avtar Singh

( Expert )
07 June 2009

How is Interest Calculated?
Interest is computed from the date of the default until the outstanding amount is paid. It is computed on a daily basis, applying the prescribed annual interest rate.

For the period ending 31st March, Gauri files her return on 28th April. She has a positive net tax liability of Rs 1000, which she pays on the 10th of July. Let us assume that the notified interest rate is 16%.

Gauri will have to pay interest for the period 29th April to 10th July (i.e. 73 days).

The amount of interest is calculated as :


Therefore, the amount payable as interest should be = Rs 32.

In addition, you will also be liable to a penalty at the rate of 1% of deficit tax per week or Rs 100 per week, whichever is higher



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