Officials to waive or reduce interest due from taxpayers

The income tax department has allowed tax officials to either waive or reduce interest payable by a taxpayer, subject to specified conditions.

Under the Income Tax Act Section 220 (2A), if a taxpayer fails to pay the tax amount specified in any demand notice, he/she is liable to pay interest at 1 per cent per month for the period of delay in making the payment.

The Act also empowers Principal Chief Commissioner (PrCCIT) or Chief Commissioner (CCIT) or Principal Commissioner (PrCIT) or Commissioner rank officers to reduce or waive the amount interest due to be paid.

The Central Board of Direct Taxes (CBDT) through a circular dated November 4 has specified the monetary threshold of the interest that can be waived or reduced by the tax officers.