Ignorance of Law is not excuse.

The proverb is
equally applicable for the Income Tax Act too.

Every person having an income during the year

has to meet many obligation specified by the Act,
Rules, Circulars and notification.

Payment of tax is not only a sufficient fulfillment

of the obligation. Besides, other duties like
submission of return, providing true and fair
information, Keeping records and accounts etc.
also should be performed in time to avoid fines.

Fines and Penalties for Tax Related

Crimes
Following are the Fines and Penalties for tax
related crimes under Income Tax Act, 2058:
Fines and Interest
Fine and Imprisonment

Non submission of Assumption tax return as

per Section 95(1) Fine Rs. 2,000/ per return
Non submission of TDS return as per Section
95A Fine 1.5 percent of TDS amount (listed
-5/10 percent and unlisted shares 10/15
percent)
Non submission of Annual Tax Return as per
Section 96 Fine: Fixed amount of tax payer
- Sec 4(4) Rs. 100 per month or 0.1 percent
per annum of assessable income which ever
is higher.

Non submission of financial statements by tax exempt

organization annual 1.5 percent of income
Failure to maintain accounts and records as per Section 81o.1% of assessable income or Rs. 1000 per fiscal year
which ever is higher
Non submission of monthly return for TDS as per section 90
1.5% of TDS amount per year

If tax is paid less than Assumed tax Interest

10% per month
Delay in payment of assessed tax Interest 10%
per month
Delay or Failure to pay tax in time Interest 10%
per month

Submission of false or misleading statement or

information by mistake 50 percent of the less
amount resulted therefrom
Submission of false or misleading statement or
information knowingly or recklessly 100 percent
of the less amount resulted therefrom

A fee of cent percent amount of the tax less paid

by an accomplice who knowingly or recklessly
aids or abets or advises any offender referred to
in this Act shall be charged on such accomplice.

Section 123 Offence of a failure to deposit

tax within time period fine an amount
ranging from Rs 5000 to Rs. 30000 or an
imprisonment for a term of not less than one
month and not more than three months or
both.
Section 124 Offence of making a false or
misleading statement Fine an amount
ranging from Rs 40000 to Rs 160000 or an
imprisonment for a term of not less than six
months and not more than two years or both.

Section 125 Offence of impeding or coercing tax

administration Fine ranging from Rs. 5000 to
20000 or an imprisonment for a term of not less
than one month and not more than three months
or both.

Section 126 Offences committed by tax officers

Authorized person penalty up to 80000 or an
imprisonment for a term of not less than one year
or both Unauthorized person penalty 80000 to
240000 or imprisonment of one year to three
years or both

Section 127 Any person who intentionally aids or

abets or advises any other person (accomplice) to
commit any offense under this Act shall be
punished with half a punishment imposed on the
offender. However, if such person is the tax
officer punishment equal to main offender
Section 128 : Punishment for other offences fine
of 5000 to 30000

Government of Nepal will initiate the case as the

party Section 130

Fine Rs. 10000 per tax period :

If VAT registration is not done despite of order
Section 5(b)
If not registered under VAT before transacting taxable
goods or service Section 10(1)
If failed to get temporary registration (Exhibition etc) Section 10A

Fine 1000 per tax period

If VAT registration certificate is not displayed in the
business place
If not used the VAT number in the transactions
If not informed within 15 days from changes made in
registration application
temporary registration (Exhibition etc) - Section 10A

Fine 5000 in each incident

If VAT invoice is not given to the purchaser Sec 14(1)
If VAT invoice is not carried during transportation of
goods with value of more than 10000. (Sec 14(4)
100 percent fine
If non registered person collects the VAT Sec. 15

If

financial statements are not updated 10,000 and if

tax officer is not allowed to review the financial
statement 20,000 Section 16 (1)
If Sales and Purchased book is not certified by the tax
officer 10,000 Section 16(3)
Tax
Return not submitted within 25 days from
completion of tax period 0.05 percent of tax/day
Sec. 18
Under invoicing 2000 per invoice
Violation of other provision 1000

Use

of computer billing software that can be changed

5 lacs

100 percent fine or 6 months imprisonment or both

Preparing false accounts, invoices or other documents,
Committing a fraud or an evasion of tax
If an unregistered person acts as if he/she were a
registered person
Purchased of under invoicing goods

10 percent annual interest In any amount including

the tax under this Act is not paid within time limit.
Section 27: Any fees, interest and penalty to be levied
under this Act shall be treated as a tax payable under
this Act