# Interest on late payment of tds

This query is : Resolved

(Querist)
18 April 2012

A very Good Morning to all of you !!!

There is some confusion related with the interest calculation on late deposit of TDS, Suppose I have made a Payment On 2nd Nov 2011 and under some circumstances I didn't deposit it on its due date i.e. 7th Dec 2011 rather I deposited the same on 26th Dec 2011.
Now I want some opinion from your side that Interest should have been charged for 1 month or for 2 months.
Plz advice....

CMA. CS. Sanjay Gupta (Expert)

18 April 2012

Interest should be charged for 2 months.

Date of Deduction = 20 Nov
Due date of deposit = 7 Dec.
Actual date of deposit = 26 Dec

Since more than 1 month but less than 2 months has elapsed since deduction interest shall be paid for two months @1.5% p.m.

CA CS Amit S. Kedia (Expert)
18 April 2012

Dear Pooja,

Interest caclulation will be as follows-

If you have deducted TDS at the time of making payment to party then interest will be charged @1.5% p.m for the period from the date on which the TDS was deducted till the actual payment of TDS
i.e
TDS deducted- 02/11/2011
Actual payment date-26/12/2011

Delay was for more than 1 month then interest will be charged for 2 months.

CA CS Amit S. Kedia (Expert)
18 April 2012

Pooja,

There is a lacuna, you can save the interest from 1.5% to 1% if you do not deduct the TDS before the date of actual payment to the govt and deduct the TDS on 26th dec and pay to govt on the same day interest will be charged for 2 months @1% only.

Thanks.

CA Kishore Tallam (Expert)
18 April 2012

Agree with experts.
Since whether u have not mentioned whether TDS is deducted or not on such payment, one more provision also to be seen.
If TDS is not deducted, then interest shall be payable @ 1% pm or part there of from date on which it is deductible till date of deduction and @1.5% pm or part there of from date of deduction till date of payment.
Hence, it is advisable not to deduct TDS rather than deducting and not remitting since non deduction attracts 1% pm interest only.

Pooja Varshney (Querist)
18 April 2012

But I have already deducted TDS at the time of Payment i.e. 2/11/2011.

CA Kishore Tallam (Expert)
18 April 2012

Then interest rate is 1.5% pm or part there of from date of deduction till date of payment. Hence interest to be paid for 2 months since remittance is made on 26th dec.

Sandeep Diwan (Expert)
08 November 2013

If dedcuted TD on 31st OCt '13 and failed to deposit TDS on due date 7th Nov'13 wheter interest is applicable for one day or two days.

Please guide

CMA. CS. Sanjay Gupta (Expert)

08 November 2013

INTEREST TO BE PAID FOR 1 MONTH.

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