Interest on tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2015 I booked a bill on let's say 20/09/2015 for Rs. 1,50,000. But TDS booking was done on 30/11/2015. TDS section 194C. My query is there is going to be interest @1% for 3months on late deduction i.e. = (150000*1%*1%*3)=Rs 45. I paid the same to central government before 7/12/2015 that was due date for payment. Now will there be any interest @1.5% as it is implied that there is been late payment also (actual TDS should have been deducted on 20/09/2015 and should have been paid on or before 7/10/2015. But the act says "Interest shall be levied @1.5% for every month or part of the month on the amount of such tax from the date on which such tax was deducted to the date on which such tax was actually remitted to the credit of central government" How to interpret this and whether am i right in levying interest only @1% for only delay in deduction or there will be 1% + 1.5% for late deduction as well as late payment?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 December 2015 Here there is late deduction for 2 months and late payment for 2 months so 5%(2+3) interest is payable.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2015 Seetharaman Sir,
but the act says "Interest shall be levied @ 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 was actually remitted to the credit of central government"
In my case TDS was deducted on 30/11/2015 and was deposited on 07/12/2015. No case of delay in payment.
Moreover why 2 months and not 3 months delay as part of a month says even 1 day will be taken as a full month. Interest will be for Sept, Oct & Nov

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 December 2015 For delayed deduction no grace period is allowed for remittance so the delay is 2 months. Totally 4 months delay so I am considering delayed deduction as 2 months.

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