How to calculate interest on short deduction demand?

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Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2016 There was PAN error in FY 2008-09 of Quarter 4 in 26Q, due to which I received notice for demand from Cpc. Payment was made to the assessee on 31.03.2008. after calculation @ 20% the short deduction amount comes Rs: 10000/-. I want to know (1) How many % of interest is to be calculated as interest on short deduction. (2) From Payment date(31.03.2008 to 28.02.2016(deposit date) 96 months is calculated. Is 1% of 96 months on 10000 as interest on late payment is to be calculated?

S SRINIVASAN

S SRINIVASAN (Expert)

18 February 2016 Instead try to reach the deductee and get his pan and revise the etds return so that the entire demand can be quashed. Also late deduction attracts penalty provisions

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2016 Srinivasan ji, If there was any possibility to get Pan of deductee, It would have been done earlier. but problem is that there is no Pan. Please advice me to calculate interest on short deduction till date?

S SRINIVASAN

S SRINIVASAN (Expert)

22 February 2016 Interest would be 1% per month or part thereof from the due date of tds deduction until date of actual deduction. For Example if the date of payment is 31-03-2008 and date of deduction is 29-02-2016, period of delay in months would be 96 months and interest at the rate of 1% PM for the sum demanded as short deduction. If you receive 271C notice, you may also end up paying penalty equal to the sum deducted apart from interest

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2016 Thanks a lot sir......

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2016 Sir, Once more question: In case if there is a delay in challan deposition interest @ 1.5% per month & part thereof will be calculated. Challan amount: 10000, Deposit Date: 07/05/15, Due date of challan is 10/05/2015. I have calculated interest @ 1.5% of 1 month. but till date I have not deposited the interest on late challan amount. I want to know would I have to calculate 1% interest extra too on late deposition of challan interest amount?