Friends
For this Query M.N.Jain, I would like to quote wording of Section 201(1A) .....principal officer does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,—
(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and
(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid,
Now Mr. Jain's query falls in Sub Section (ii) of Section 201(1A). In this Query
Date of Deduction is 25.02.2011
Due Date of Deposit is 07.03.2011
& Date of Deposit is 10.03.2011
Two Part Months are there (February and March) so literally 1.5% for Every Part Month makes it to 3% for Two part months.
In my View Effective Rate of Interest for delay in deposit is 3%
(Kindly Correct me if i am wrong in my interpretation)