The Income Tax Department has set the three-layered monetary limit for reduction or waiver of interest on unpaid tax. This will help the assesses to approach the exact hierarchy to get relief.

According to an order issued by the Department, interest up to ₹50 lakhs can be reduced or waived by Principal Commissioner (Pr. CIT) or Commissioner (CIT). For amount between ₹50 lakhs but below ₹1.5 crore, Chief Commissioner (CCIT) or Director General of Income Tax (DGIT) has been empowered to provide relief. Amount above ₹1.5 crore can be reduced by waived by the Principal Chief Commissioner (Pr. CCIT).

There is no change in conditions for waiver or reduction. An assessee needs to satisfy all three conditions to get relief. First, payment of such amount has caused or would cause genuine hardship to the assessee. Second, default in the payment of the amount on which interest has been paid or was payable due to circumstances beyond the control of the assessee. And third the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

Section 220 (2) of the Income Tax Act deals with the consequences of non-payment a taxpayer. If a taxpayer fails to pay the amount specified in any notice of demand under section 156 of the Act, she shall be liable to pay simple interest at the rate of 1 per month or part of the month for the period of delay in making the payment. Further, the law empowers the Principal Chief Commissioner (Pr. CCIT) or Chief Commissioner (CCIT) or Principal Commissioner (Pr. CIT) or Commissioner (CIT) for reduction or waiver of the amount.

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