Interest calculation on late payment of TDS

This query is : Resolved 

(Querist) 06 April 2011

Dear Friends

Please resolve my below doubt.

Suppose I made a payment u/s 194C on 28/Feb/2011 and tds has also been deducted on 28/Feb/2011. But i deposited this tds to the govt. treasury on 02/April/2011. Now my query is that interest @ 1.5% for late deposit u/s 201(1A) will be levied for how many months ?


M N Jain

B.Chackrapani Warrier (Expert) 06 April 2011

Three months interest has to be paid. Calculation ,as per my understanding is as follows:-
28/2/2011 -- 1 month
1 to 31/3/2011 -- 1 month
1 to 2/4/2011 -- 1 month
Total -- 3 months

CMA. Subhash Kumar Jha (Expert) 06 April 2011

from 28/Feb/2011 to 27/Mar/2011 : 1 Month
28/Mar/2011 to 02/Apr/2011 : 1 Month

So it will be 2 month.

CMA. Subhash Kumar Jha (Expert) 06 April 2011

Interest from 01.07.2010

For late deposit of TDS after deduction (period :date from tax deducted and date of actual deposit)(rate 1.5 % per month or part thereof)

Here the default period is calculated from date of deduction to actual date of deposit.
So the calculation is from date to date...

M N Jain (Querist) 06 April 2011

My doubt is still open since my confusion is also between two months or three months ?

I am not able to reach at a concrete decision as to whether interest should be charged for two months or thre months ?

May i have some more views ?

M N Jain

Aditya Maheshwari (Expert) 06 April 2011

It should be two months. Further there is not clarity in the section 201(1A) but i still go with the one which is beneficial to the assessee

CA AYUSH AGRAWAL (Expert) 10 July 2013

Section 201(1A) is not Clear.
Because earlier It was month or part of month.
means february month to be counted as one month.
and calculating as per Mr. Jha is in indirect taxation for days basis.

but as per my understanding of line given in said section, it should be understood that 3 Months interest to be taken.
in income tax calender month to be taken for interest calculation. (not days basis)

Aditya Maheshwari (Expert) 10 July 2013

Now as eTDS returns have been processed interest will be liable for 3 months and not 2 months as stated by me earlier.,CS,CAFinal Tushar Sampat (Expert) 10 July 2013

I Agree with B.chackrapani warrier as its the perfect interpretation, as even 1 day is taken as month for calculating interest.

CA AYUSH AGRAWAL (Expert) 10 July 2013

can any one send me notice whoever received of three months. pls.
at my mail id.,CS,CAFinal Tushar Sampat (Expert) 10 July 2013

Refer V K Singhania direct tax law and practice u will get many eg.

CA AYUSH AGRAWAL (Expert) 10 July 2013

pls can you send me any link of the same.
by highlighting the portion.,CS,CAFinal Tushar Sampat (Expert) 10 July 2013

sorry i do not have any soft copy of VK singhania.

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