THE INTEREST TAX ACT 1974

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The economic graph of a country depends on the revenue of that country. The government from time to time creates new strategies for the generation of revenue. The maintenance of the economy is the basic motive of a democratic government that ultimately aims at the welfare of the people and the development of the country. The taxation laws under different category give the proper guidance for the collection of tax from the people. The Interest Tax Act 1974 was enacted with the object to collect tax upon the interest that is due on loans or any other credit payment.

The Interest tax act defines an assessee as anyone who is subject to the payment of chargeable tax under the provisions of act of 1974. Other than the chargeable interest tax any refund towards the assessee is also provided in the act. The assessment is made in the financial year by issuing notice to the assessee to produce the relevant documents or evidence to calculate the accurate interest rate. The interest rate includes the chargeable tax to the government or the refund to the assessee. Section 8 of the act provides the criteria for the assessment of chargeable tax or the refund. If an assessee fails to furnish the details of the returns or the revised return the assessing officer has the authority to issue show cause notice to the assessee for providing him a reasonable opportunity to be heard. The assessing officer can with the all relevant records and materials he is provided can calculate the chargeable tax for the sum payable.

An aggrieved person by the order of the assessing officer can prefer appeal. An appeal to the commissioner stating the reasons of his grievance shall be furnished. Any appeal regarding the matter of assessment, penalty or fine shall be made before the commissioner of appeals within thirty days from the date of notice issued to the assessee regarding the assessment, penalty or fine.

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Any appeal preferred after the prescribed period of limitation can be admitted if the commissioner finds it couldn’t be filed due to genuine cause or reason. The appeal shall be made in the prescribed form and manner provided in section 15 of the act. In the hearing and determination of the appeals the commissioner has to make the decision in accordance with the prescribed procedure in accordance with the Income Tax Act. An appeal against the commissioner’s order shall be taken up before the appellate tribunal within sixty days of the date of order passed by the commissioner. According to section 17 of the act any rectification or amendment on the order passed by the commissioner can be done on the basis of an application given by the assessee or by the competent authority’s suo motto action. Section 20 empowers the commissioner to make revision on the order made by him. Any statement or documents relating to the income tax for the purpose of assessing shall be used for the purpose of the Interest Tax Act 1974.

The act of 1974 has provisions stating penalties or punishment for the furnishing false statements and willful attempt to evade tax. A rigorous imprisonment for three months which may extend to seven years and fine is imposed for giving false statements. For evasion of tax is also subject to imprisonment of three years to seven years and fine.

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The back bone of a countries socio economic balance is based on its revenue and it is the duty and obligation of a citizen to pay the tax duly without any default for the welfare of the country.