The Uttar Pradesh government has rolled out the ‘Interest Waiver Scheme-2026‘. Under this scheme, traders and other eligible taxpayers will be granted a waiver on the interest and penalties accrued on their outstanding tax dues. This waiver can range from 50% to 100%, depending on the amount of the outstanding principal tax.
The scheme was declared via a government order on October 16, which includes arrears up to December 31, 2025. The same shall be implemented across all 75 districts for three months from the issuance date of the order.
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As per the scheme, it allows taxpayers with principal dues of up to Rs 10 lakh to obtain a 100% exemption from interest and eligible penalties upon depositing the whole principal amount.
There is an exemption of 90% of the interest for principal dues between ₹10 lakh and ₹1 crore. The exemption will be 75% for dues between Rs 1 crore and Rs 5 crore and 50% for dues of more than Rs 5 crore. Eligible penalties will be exempted across all four categories, subject to the conditions of the scheme.
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The scheme includes demands and arrears under stipulated laws, including the UP Sales Tax Act, 1948, Central Sales Tax Act, 1956, UP Trade Tax Act, 1995, UP Entry Tax Act, 2007, and UP Value Added Tax Act, 2008, among other listed legislation.
Relief is available for accepted and disputed tax demands. Taxpayers whose cases are due before courts should satisfy the conditions, including submitting relevant documents and affidavits concerning the withdrawal of proceedings, wherever applicable.
The order of the government categorises that the penalty exemption is applicable only to penalties levied for non-payment of outstanding dues. Other penalties are not included in the scheme.
News Source: www.hindustantimes.com
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