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14.5. Interest and Penalties

Penalties apply for failure to maintain records, late filing or the failure to file returns as follows:

  • Failure to maintain documents attracts a penalty at the rate of 0.1% on gross assessable income or NPR 1000 per month whichever is higher.
  • Under estimation of advance tax instalments attracts interest at 15% per annum on the shortfall amount if the estimated tax is less than 90% of the actual income tax liability.
  • Failure to submit estimated income statement attracts a penalty of NPR 2000 per statement.
  • Delay in filing return attracts a penalty at the rate of 0.1% on gross assessable income or NPR 100 per month whichever is higher.
  • Filing of false or misleading returns attracts a penalty ranging from 50% to 100% of tax loss.
  • Failure to pay tax attracts interest at 15% per annum for the period of failure to pay tax.