Interest on delay payment of tds

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siddharth (Querist)
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28 March 2015 What is the basis of calculations of Interest on delay payment of tds ?Whether delay of 1 day amounts to 1 month ? Also if calendar month is different, will it amount to 2 months

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 March 2015 Interest is calculated for delay in payment @ 1.5% per calender month. So even a days delay can result in 1 months interest.

CA Pankaj Kr Agrawal

CA Pankaj Kr Agrawal (Expert)
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29 March 2015 Extract of Section:-

“(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,

(i) 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 deducted; and

(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

Conclusion :-

Interest shall be paid on basis on calender month basis. So even if one day delay in payment of TDS from due date interest shall be pay.

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