Interest on non-payment or delayed payment of tax.

(1) If a proprietor, fails to pay the amount of tax due from him under this Act, he shall, in addition to the amount of tax, be liable to pay interest on the said amount of tax at the rate of two per cent per month from the due date of payment till the date, he actually pays such tax alongwith the interest. (2) When a revised return filed under sub-section (6) of section 13 shows higher amount of tax due, the proprietor shall be liable to pay interest at the rate of two per cent per month on such higher amount of tax from the due date till the date, he actually pays the due amount of tax alongwith the interest. (3) If a proprietor fails to declare the amount of tax in the return which should otherwise have been declared, such proprietor shall be liable to pay interest at the rate of two per cent on such amount of tax from the due date till the date, he actually pays such amount of tax. (4) If the amount of tax or penalty due from a person, is not paid by him within the period, specified in the notice of demand or if no such period is specified, within a period of thirty days from the date of service of such notice, the proprietor shall, in addition to the payment of amount of tax or penalty, be liable to pay interest on such amount at the rate of two per cent per month from the date, the tax is due till the date, he actually pays the due amount of tax or penalty, as the case may be, alongwith the interest : Provided that where the recovery of tax or penalty, as the case may be, is stayed by an order of the competent authority, the amount of tax or penalty shall, after the order of stay is vacated, be recoverable alongwith the interest at the aforesaid rate on the amount, ultimately found to be due and such interest shall be payable from the date, the tax or penalty had first become due. (5) The amount of interest payable under this section shall,— (a) be calculated by considering part of a month as a full month ; (b) for the purposes of collection and recovery, be deemed to be tax under this Act ; and (c) be in addition to the penalty, if any, imposed under this Act. Explanation.—For the purpose of this section, if payment of tax is made by the proprietor through cheque, and the cheque is dishonoured by the bank, then it will amount to failure on the part of the proprietor to pay tax.