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Tds interest calculation (Income Tax)

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This query is : Resolved


( Author )
07 February 2012

Sir,
The assessee has deducted TDS@ 2.06 % while it should be deducted @ 10.30 % for A.Y.10-11. Now my question is that for the calculation of TDS interest , the interest rate should be taken @1% on the WHOLE period from the date on which it is deductible to the actual depositing date (eg. the dt. of payment is 10-02-2012) on the remaining TDS amount or it should be taken as rate @1% upto 30-06-10 & onwards 1-7-10 to 10-02-12 @1.5 %.


CMA Ramesh Krishnan

( Expert )
07 February 2012

Please clearly understand Government increased the Interest on delayed payment only TDS deducted correctly but not paid with in the due date. such as 1.5% applicable you are deducted but not paid to Government with in due date. your case need to do 2 different calculation

1% per month or part of month Interest apply for the short amount deducted (difference of 10.30 to 2.06) from the date of actually deductible to date of deduction

From the date of deduction to Date od payment is 1.50% per month or part of month interest rate applicable


Provision read as follows

Interest up to 30.06.2010

For late deduction of Tax deduction at source-(rate 1 % per month or part thereof)
For late deposit of TDS after deduction (rate 1 % per month or part thereof)

Interest from 01.07.2010

For late deduction of Tax deduction at source-(period date from tax deductible to date of actual deduction )(rate 1 % per month or part thereof)
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)




Rushit Shah

( Author )
07 February 2012

but the assessee has not deducted the TDS till now so that he has to pay interest @ 1% for the whole period. Is it right sir ?


Rushit Shah

( Author )
07 February 2012

but the assessee has not deducted the TDS till now so that he has to pay interest @ 1% for the whole period. Is it right sir ?


CMA Ramesh Krishnan

( Expert )
07 February 2012

yes. since not deducted still, need to pay 1% per month or part of month


Rushit Shah

( Author )
08 February 2012

Thanks a lot sir...!!


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