Penalty and payment options under Section 74A

Under Sec 74A, non-fraud cases carry penalty of 10 percent of tax or ₹10,000, whichever is higher, and nil if paid within 60 days of the notice. Fraud cases carry penalty equal to tax, cut to 15, 25 or 50 percent if paid before notice, within 60 days of notice, or within 60 days of order.

Non-fraud: on ₹6 lakh tax, paying with interest within 60 days means no penalty, against ₹60,000 later. Fraud: paying within 60 days means 25 percent, ₹1.5 lakh, against ₹6 lakh. Read whether the notice alleges fraud because that decides the slab.