India's stock market regulator Securities and Exchange Board of India (Sebi) on Friday delegated power to its panel of Executive Directors and Whole-time Members to waive or reduce interest on recovery proceedings initiated for failure to pay penalty.In a circular issued today (January 10), Sebi allowed its panel of executive directors to waive or reduce interest where the interest amount is less than Rs 2 crore. In other cases, a panel of whole-time directors can reduce or forego it. Section 220(2) of the Income-tax Act, 1961 empowers the recovery officer of Sebi to recover the outstanding amount along with the applicable interest. Prior to the issue of the circular, the power rested with the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to reduce or waive the amount of interest paid or payable.Further, the Sebi board has approved that the waiver or reduction of interest will not be applicable in cases where the interest for failure to remit fees to the board is levied on the intermediaries in accordance with respective intermediary regulations.This new rule will also not be applicable where the interest on the amount directed to be disgorged or refunded is levied in accordance with the orders passed under section 11, 11B, 11(4) of the SEBI Act.Procedure for application1) The application seeking waiver or reduction of interest can be forwarded to the Recovery Officer having the necessary jurisdiction over the matter in the format prescribed under the Sebi norms. The applicant will be required to submit all documents in support as per the prescribed norms of the Income-taxAct, 1961.The applicant will be required to place on record documents supporting that the payment of such amount has caused or would cause genuine hardship to the assessee. Documents which support the reason for default in the payment of the amount. The applicant will also be required to prove that he has cooperated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.The application for waiver or reduction of interest can only be sought for the period subsequent to the service of the notice of demand.Moreover, an application can be filed only in the cases where the principal amount due under the notice of demand is fully paid.The order accepting or rejecting the application, either in full or in part, will have to be passed within a period of twelve months from the end of the month in which the application complete in all respects is received by the regulator.No order rejecting the application can be passed unless the applicant has been given an opportunity of being heard.Also Read: Metal sector Q3FY25 earnings to be a mixed bag. Vedanta, Coal India among 8 top brokerage buys(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)