Interest on Delay Payment of TDS

This query is : Resolved

CA HANI (Querist)
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16 September 2009 What is the latest rate of interst on delay payment of TDS .

2)An assessee has deducted TDS on 31.03.2009 , which is supposed to be deposited on 31.05.2009 , the assessee has deposited the same on 15.09.2009 . Please advise from which date interest will calculated ( i.e. whether from 01.04.2009 or from 01.06.2009 )and under which section it is .

3)Is there any penal provision if TDS has not been deposited till 30.09.2009 and assessee claim the expenses in the year of payment of TDS

Ratan Sharma

Ratan Sharma (Expert)
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16 September 2009 1. Interest is payable from 1.4.2009 to 30.9.2009 i.e. for 6 months @ 1% per month.
2. No penal provisions except interest on delayed payment.

CA HANI

CA HANI (Querist)
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16 September 2009 I got opinion that it should be from the due date i.e. from 01.06.2009 , may, I, request you to please recheck it

Taranjit Singh

Taranjit Singh (Expert)
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17 September 2009 Hello dear....

Interest on late payment of TDS, is applicable at following rates by simple interest rate method.

A) period prior to 01.04.08 interest is chargeable @ 12 per cent per annum.

B) after .01.04.08 interest is chargeable @ 1 per cent for every month or part of the month ,means full month interest will be charged for fraction period of month

other points

while calculating interest TDS amount payable on which interest is to be calculated (principal amount) should be rounded of to nearest multiple of 100 ignoring fraction of Rs.100.
Interest will be charged on the amount payable form the date on which such tax deductible to the date of actual payment.
Means while calculating period for interest purpose ,the period prescribed for making the payment to the credit of central government is not to be excluded.
Interest liability is absolute and mandatory and should be deposit through self assessment and assessing officer can not exempt from interest liability.
With effect from 1.6.2006 ,this interest must be paid on self assessment basis by the person every quarter before furnishing the quarterly return.(form 24Q/26Q/27Q)

CA HANI

CA HANI (Querist)
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17 September 2009 In case of TDS deducted on 31.03.2009 and deposited on 15.09.2009 , whether Interest will be for six months i.e. April 09 - Sept . 09 or for Seven months i.e. March 09 - Sept. 09

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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18 September 2009 section 201(1A) states as under

[(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section 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 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 actually paid [and such interest shall be paid before furnishing [the statement] in accordance with the provisions of sub-section (3) of section 200].]

AS SUCH IT IS FROM THE DATE ON WHICH TAX IS DEDUCTIBLE AND NOT FROM DUE DATE OF PAYMENT OF TDS

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