difference between fine penalty

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rajeev khulbe

rajeev khulbe (Querist)
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05 August 2010 sir plz tell me difference between fine penalty & interest.

regards
rajiv

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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05 August 2010 A fine is imposed by a court when you are convicted of a criminal offence.

A penalty is issued by an appropriate authority when you have not complied with the law but you have not committed a criminal offence. This means you do not get a criminal record e.g. parking and fare evasion. If you fail to pay the penalty, you will have to go to court and may then have to pay a fine and get a criminal record.

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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05 August 2010 Interest
Interest is calculated based on how much tax you owe. Interest rates change every three months. Currently, the IRS interest rate for underpayment of tax is % per year. The interest is calculated for each day your balance due is not paid in full.

VINOD ARORA

VINOD ARORA (Expert)
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05 August 2010 Fines are amounts of money that the court can order a person to pay for an offence following a successful prosecution.

Penalties do not require court proceedings and are imposed for failing to comply with a provision of some Act of law.

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