Interest on Income Tax

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Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2011 Dear Sir,

I have deducted TDS of Rs. 34193/- of a party on 04/May/2011 and I would like to deposit it on 16/June/2011, please tell me how much Interest I have to pay on this amount. If in case period is less than 1 month then how much interest required to paid.

CA Harish Suwalka

CA Harish Suwalka (Expert)
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16 June 2011 sec 201(1A)says that
"interest on short payment or non-payment will be chargeable at the rate of 1.5% per month or part there of.

so in your case interest @1.5% will be amounts to 513 Rs.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 June 2011 Due date is June 7,2011.
Remittance date is June 16,2011.
Delay is only for part of a month.
Interest rate is 1.5% per month or part of a month.
Interest payable is 34193 X 1.5/100 X 1/12 = Rs. 43/-.

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2011
Thanks for your expert comment,

Sir, under section 201 of the Income-tax Act, for sub-section (1A),

(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, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200.”.

Sir does this mean each period has been upper rounded off to a month. Even a default of one day means loss of interest for one month.

Also tell me do we have to round off TDS amount of Rs. 34193 to Rs. 34100 while calculating Interest.

Waiting for your reply..