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Discussion > Income Tax >

Interest calculation on tds late payment

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MBA-Finance


[ Scorecard : 76]
Posted On 01 May 2013 at 12:22 Report Abuse

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.



Total thanks : 1 times

Online classes for CA CS CMA



Member (Account Deleted)
Intern


[ Scorecard : 2198]
Posted On 01 May 2013 at 12:35

1 month delay...



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Rahul Suneja
CA-Final, CS-Exec


[ Scorecard : 205]
Posted On 01 May 2013 at 12:46

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



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KARANDEEP,CA,B.Com,CS FNL
JOB


[ Scorecard : 436]
Posted On 01 May 2013 at 13:02

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




Member (Account Deleted)
Intern


[ Scorecard : 2198]
Posted On 01 May 2013 at 13:04

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




Anil Dandu
CA FINAL


[ Scorecard : 205]
Posted On 01 May 2013 at 13:07

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


[ Scorecard : 21]
Posted On 01 May 2013 at 14:56

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
PARTNER


[ Scorecard : 39]
Posted On 01 May 2013 at 15:59

 

How is interest to be calculated ?

  1. Interest is to be calculated for every month or part of a month comprised in a period, 
  2. Any fraction of a month shall be deemed to be a full month 
  3. 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 
  4. 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

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.

 



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Vilas C. Rajapkar
Profession


[ Scorecard : 130]
Posted On 01 May 2013 at 17:01

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 7897 times

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CMA. CS. Sanjay Gupta
"PROUD TO BE AN INDIAN"


[ Scorecard : 89132]
Posted On 01 May 2013 at 17:23

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

 

 

For a better understanding check out below links---
 
http://www.caclubindia.com/articles/a-day-s-delay-in-tds-remittance-interest-upto-3--6580.asp#.UYEEj7VjWbY
 
 
http://www.caclubindia.com/experts/tds-577865.asp#.UYEFKbVjWbY


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