LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Interest calculation on tds late payment

VISHAL GUPTA (MBA-Finance) (145 Points)

01 May 2013

I want to know that If i deducted TDS on 1/4/2013 & deposited it on 20/5/2013. What is the calculation of interest for this on monthly basis i.e. 1 month delay or day basis i.e. 13 days ? Please solve my query.

Reply
Follow
Share

43 Replies

(Guest)

1 month delay...

1 Like

Rahul Suneja (CA-Final, CS-Exec) (215 Points)
Replied 01 May 2013

If there is any delay in depositing the amont of TDS intrest shall be charged @ 1.5% per month or part of month from the Date on which TDS was Deducted till the Actual Date of Payment. Therefore intrest shall be charged from 01/04/2013 to 20/05/2013 i.e 2 months

4 Like

KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 01 May 2013

Originally posted by : Rahul Suneja
	If there is any delay in depositing the amont of TDS intrest shall be charged @ 1.5% per month or part of month from the Date on which TDS was Deducted till the Actual Date of Payment. Therefore intrest shall be charged from 01/04/2013 to 20/05/2013 i.e 2 months

Agreed With Rahul j

(Guest)

oops... thanks.. Learned something new...!!!

Anil Dandu (CA FINAL) (205 Points)
Replied 01 May 2013

If any delay in TDS deposit the rate of interest is 1.5% per month r part of the month.

in the above case interest is 2 months

ANKUSH GARG (CA) (21 Points)
Replied 01 May 2013

It will be for 2 months as calculation of days from date of deduction upto date of payment,and then days calculated will be considered to calculate months.

CA MOHIT SINGHAL (Practice) (937 Points)
Replied 01 May 2013

How is interest to be calculated ?

Interest is to be calculated for every month or part of a month comprised in a period,
Any fraction of a month shall be deemed to be a full month
The amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and
for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated.

Example of Interest Calculation

Date Of Payment	Date of Deduction	Due Date	Date of Deposit	Delayed Deposit		Delayed Deduction
Date Of Payment	Date of Deduction	Due Date	Date of Deposit	Months	Rate	Months	Rate
05/04/2012	05/04/2012	07/05/2012	09/05/2012	2	1.50%	-	-
10/04/2012	10/04/2012	07/05/2012	09/05/2012	1	1.50%	-	-
02/07/2012	04/08/2012	07/09/2012	07/09/2012	-	-	2	1%
02/07/2012	04/08/2012	07/09/2012	15/09/2012	2	1.50%	2	1%

One Day delay may charge you Interest @ 3 %: Suppose tax is deducted on 05.04.2012 and due date is 07.05.2012 however deposited after delay of one day on 08.05.2012.

Delay period in above case is : From 05.04.2012 to 08.05.2012 is one month and 3 days .As per above provisions part of the month is to be taken as full month .so delay of 2 month means 1.5 % per month fo 2 month =3 % interest . So delay of only one day of tds may cause you interest loss of three percent.

Rectifying Interest Default

You may download default/Justification report notices after logging into your TAN account at tdscpc.gov.in
Default Notice is a plain excel sheet without any password protection
If there is any default on account of non-payment or short payment of interest, you need to pay up the same
After paying , you have to file correction statement by including the interest payment challan.

5 Like

Vilas C. Rajapkar (Profession) (146 Points)
Replied 01 May 2013

In the above case interest is 2 months

Here I attach Interest on TDS Calculator

Attached File : 26210 1169041 26210 51245 interest on tds calculator.xlsx downloaded: 14790 times

4 Like

CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114215 Points)
Replied 01 May 2013

Interest to be paid for 2 months...i.e., 3% of TDS amount.

For a better understanding check out below links---

/articles/a-day-s-delay-in-tds-remittance-interest-upto-3--6580.asp#.UYEEj7VjWbY

/experts/tds-577865.asp#.UYEFKbVjWbY

1 Like

Harshul Agarwal (n.a) (21 Points)
Replied 03 May 2013

Originally posted by : VISHAL GUPTA
	I want to know that If i deducted TDS on 1/4/2013 & deposited it on 20/5/2013. What is the calculation of interest for this on monthly basis i.e. 1 month delay or day basis i.e. 13 days ? Please solve my query.

Dear, interest will calculated on monthly bases not day bases under sec. 201(1A)