Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Tds

Kapil Dhiman (Accountant) (304 Points)

19 February 2016

Hi everyone,

I want to know how can we calculate interest in TDS from salary if tds is not deducted in equal installments from employee salary ?

Please explain by taking an example

Thanks in advanceI

Its urgent

Please help

Reply
Follow
Share

5 Replies

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 19 February 2016

Delay in depositing TDS or failure to deduct TDS

If TDS has not been deducted when it was applicable, interest is levied on the amount of TDS

Interest @ 1% for every month or part of month from the date on which it was deductible to the date on which it was actually deducted.

If TDS was deducted but not deposited timely, interest is levied on the amount of TDS

Interest @ 1.5% for every month or part of month from the date on which it was deducted to the date on which such tax was remitted to the government for payment.

There may be a situation where although no TDS has been deducted by the payer, but the receiver has accounted for the income in his return and paid the tax due on such income. In such a case, interest will be applicable to the payer @ 1% on TDS amount from the date TDS was deductible to the date on which the receiver submitted his tax return. (This is only applicable where the receiver is resident in India).

When to pay Interest on delay

Any interest applicable must be deposited before filing quarterly TDS return.

Kapil Dhiman (Accountant) (304 Points)
Replied 19 February 2016

Thanks but i also know about that,i want to know to inerest calculation needs to be done

for example A salary is 50000/- per month

toal salary 600000 per annum

transport 19200

Balance 580800

Investment 150000

claimed

net taxable 430800

Total tax (430800-250000) = 18080 + 542 = 18622/12=1551 per month

now he is only providing investment of rs 50000/- then is needs to be calculted on less calculated amt or not if yes then on how much amt interest needs to be calculated ?

ujjaishravan (accountant) (212 Points)
Replied 20 February 2016

Its quite simple buddy., Recalculate TDS to be deducted for full year. less it from TDS deducted so far., divide the balance payable to the remaining months of salary to be paid during the FY, accordingly deduct TDS., deposit it to Govt. file the returns. thats all. Problem solved. no need to pay interest at all....

A.shanmuga sundaram (Deputy manager) (73 Points)
Replied 20 February 2016

The above information was correct,

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 26 February 2016

You need not deduct tds in equal installment, there can be increase and decrease in tds deducted month on month the only issue being tds on salary as a whole should be deducted by march and paid. No interest liability arisies if monthly tds for salary is not equal.