Interest on non deduction of TDS

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P.G.Sudharshan

P.G.Sudharshan (Querist)
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07 September 2010 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 1% 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
■at 1.5% 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”

Suppose i have billed on 15/07,deducted on 08/08,and remitted on 08/09,pls clarify whether i am right if i calculate interest as below.

15/07 to 31/07 1%
01/08 to 08/08 1%
08/08 to 31/08 1.5%
01/09 to 08/09 1.5%
Pls Clarify as soon as possible
Thanks in advance.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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07 September 2010 Finance Act,2010 has introduced the cited provision w.e.f 01/07/2010. According to that amended provision, your understanding is correct.

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