The Hindu : Interest on delayed tax payment hiked

Online edition of India's National Newspaper
Wednesday, Sep 10, 2003

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Interest on delayed tax payment hiked

By Our Special Correspondent

NEW DELHI SEPT. 9. The Union Finance Ministry has reduced the rate of interest payable and interest chargeable from assessees under the Income Tax, Wealth Tax and Expenditure Tax Act. Through an ordinance promulgated on Monday, it has been stipulated that the interest will now be payable at the rate of six per cent per annum on excess tax paid to the Government while interest chargeable on late payment would be at the rate of 12 per cent per annum with effect from September 8.

The Finance Ministry also announced that with effect from September 8, 2003, tax will be collected at source at the rate of one per cent on the sale of alcoholic liquor and scrap, 2.5 per cent in the case of timber and other forest produce and five per cent in the case of tendu leaves. However, public sector companies, the Central and State Governments, clubs and embassies have been excluded from the definition of buyers. The new rates have been fixed on the basis of the Taxation Laws (Amendment) Ordinance, 2003 promulgated on Monday to amend certain provisions of the Income Tax Act, the Wealth Tax Act and the Expenditure Tax Act. Consequently, ship-breaking has been included in the exempted category for the purpose of section 10(15)(iv) in respect of interest payable outside India. A new section 10BA has been inserted in the Income Tax Act to provide for a deduction of 100 per cent of the profits derived from export of wood-based handicraft items. Interest payable to the Nordic Investment Bank would be exempted from income tax.

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