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If a T1 or T2 return is filed late, certain charges apply. Which of the...

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Accounting

If a T1 or T2 return is filed late, certain charges apply. Which of the following statements is INCORRECT?
a. Penalties and interest are based on the balance of tax payable at the taxation year-end.
b. For the first offence, penalties are charged at a rate equal to 5%, plus 1% for each complete month that the tax due is outstanding.
c. For the second offence, penalties are charged at a rate equal to 10%, plus 2% for each complete month that the tax due is outstanding.
d. Interest is calculated at a prescribed interest rate, set by Canada Revenue Agency.
e. Late-filing penalties are charged but there are no interest charges.
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