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Tds late payment - regs

aaassipl (CFO) (138 Points)

08 July 2016

Dear Professional, if the date of deduction is 30.06.2016? Due date of Tds payemt is 07.07.2016 and actual deposit date is 08-07-2013. This is actual situation, for which I am charged interest of 1 day @ 1.5% per month in justification report.

Whether this is the correct calculation or not , please let me know above that

-Maya

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31 Replies

CA Karan Sathe (CA ) (564 Points)
Replied 08 July 2016

Interest at 1.5% p.m or part thereof. so charged for the full month even delay by 1day

1 Like

CMA Poornima Madhava (CMA) (13097 Points)
Replied 08 July 2016

Assuming the date of payment as 8/7/2016, interest is payable for 1 month @ 1.5% since no. of days less than a month (even 1 day) shall be considered as 1 month for the purpose of interest and hence calculation is correct.

2 Like

aaassipl (CFO) (138 Points)
Replied 08 July 2016

Thank u......

AJAY KUMAR JAIN (SERVICE) (101 Points)
Replied 08 July 2016

Wrong in my opinion that should be 3%

AJAY KUMAR JAIN (SERVICE) (101 Points)
Replied 08 July 2016

Wrong in my opinion that should be 3%

CMA Poornima Madhava (CMA) (13097 Points)
Replied 08 July 2016

@ Ajay: Why do you think 1.5% is wrong? Could you give me one scenario where interest @ 1.5% would be applicable, if this is wrong?

AJAY KUMAR JAIN (SERVICE) (101 Points)
Replied 08 July 2016

@ POORNIMA JI, INTEREST @ 1.5% IS LIABLE TO BE PAID FROM THE DATE ON WHICH THE TDS WAS DEDUCTED AND NOT FROM THE DATE THE TDS WAS DUE

AJAY KUMAR JAIN (SERVICE) (101 Points)
Replied 08 July 2016

@ POORNIMA JI, INTEREST @ 1.5% IS LIABLE TO BE PAID FROM THE DATE ON WHICH THE TDS WAS DEDUCTED AND NOT FROM THE DATE THE TDS WAS DUE

1 Like

CMA Poornima Madhava (CMA) (13097 Points)
Replied 08 July 2016

That am aware of. My question is completely different. In this situation, if 1.5% is not correct, then in which situation 1.5% would be applicable?

CA ASHOK DAHIYA (CA) (124 Points)
Replied 08 July 2016

@ Poornima Madhava.............I'm agreed with Ajay kumar's answer since in case of late deposite interest shall be paid @ 1.5% p.m from the date of actual deduction. So as per me 2 month's interest shall be calculated u/s 201 (1A)

1 Like

CA Brijendra Tripathi (Consultant) (142 Points)
Replied 09 July 2016

Yes TDS @ 1.5% will be applicable, but as per real situation given due to Bank holidays on the ocassion of ID-ul-Fitre on 07.07.2016 one day grace shall be given, Isn't so??????

CMA Poornima Madhava (CMA) (13097 Points)
Replied 09 July 2016

@ Ashok and Ajay: I forgot to mention one thing. If one reads the post carefully, Justification report which is generated by traces says 1.5% (not 3%).

Rohit (student) (53 Points)
Replied 09 July 2016

(1.5% * 2 months) is equivalent to 3%..

CA ASHOK DAHIYA (CA) (124 Points)
Replied 09 July 2016

@ Poornima For which I am charged interest of 1 day @ 1.5% per month in justification report, it's written by Maya in question. @ 1.5% per month (for 2 months, might be possible she forgot to mention :P ) .

But whatever the case may be, as per fact given in question, if we assume tds was deducted in 30th of the month i.e. last day of month but deposited at 1 day delay, so in that case section 201(1A) clearly mention that interest shall be charged @ 1.5% for late deposit from the date of deduction.

Here we can conclude the first day after deduction would be next day of deduction i.e. 1st day of next month i.e. deposit wala month. So in this case it's right, interest is correctly charged @ 1.5% for 1 month only.

On the other hand, if deduction had been made any day except last day of month, then surely interst would have been charged for 2 months.

So your answer is correct but you didn't consider the date of deduction. Co-incidently deduction date was last day, therefore answer is correct :)