Interest & penalty

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Amol kumar (Querist)

25 February 2013 Dear sir,

Some reason my co. is not filled TDS return from AY- 2008 - 2009.

I Want to know that how much penalty & interest would be charged on amount.

Please sir tell me.

Beat Regards

Amol

CA Ayush Agarwal

CA Ayush Agarwal (Expert)

25 February 2013 Penalty & Interest is Only Chargeable When You have Deducted TDS and Not Filed Return.

I Mean For NIL TDS return, No Penalty is There.

Amol kumar

Amol kumar (Querist)

27 February 2013 Dear Sir,

We deducted the TDS But not yet Filled Return so i want to know which rate of Interest is charged For FY - 2008-09, & 2009-10. Also the penalty of not filling return.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

01 August 2024 If your company has not filed TDS returns for the assessment years 2008-09 and 2009-10, you will need to calculate both interest and penalty as per the Income Tax Act, 1961. Here’s a breakdown of what you should consider:

### **1. Interest on Late Payment:**

**Interest on Late Payment of TDS (Section 220):**
- **Rate:** 1% per month or part of a month on the amount of TDS which was not paid or was paid late.
- **Period:** The interest is calculated from the date on which TDS was deductible until the date of payment.

**Interest under Section 201(1A):**
- For the financial years 2008-09 and 2009-10, you need to calculate the interest from the date on which the TDS was deductible until the date on which the TDS was paid or until the date of filing of the TDS return.

### **2. Penalty for Non-Filing of TDS Returns:**

**Penalty for Late Filing of TDS Returns (Section 271H):**
- **Rate:** Penalty can range from ₹10,000 to ₹1,00,000 per default.
- **Conditions:** The penalty is imposed for failure to file the return of TDS within the stipulated time. If the return is filed after the due date but before any notice is issued, the penalty will be levied at ₹10,000. If the return is not filed even after receiving a notice, the penalty can be as high as ₹1,00,000.

### **Steps to Calculate Interest and Penalty:**

1. **Determine the Total TDS Amount:** For each financial year.
2. **Calculate the Interest:**
- Interest is 1% per month or part of a month from the due date of deduction until the date of payment or filing.
- Use the formula: \( \text{Interest} = \text{TDS Amount} \times 1\% \times \text{Number of Months} \)

3. **Calculate the Penalty:**
- For non-filing, you may be liable for a penalty ranging from ₹10,000 to ₹1,00,000, depending on when you file and whether you receive any notices.

### **Example Calculation for Interest (Illustrative):**

- **TDS Deducted:** ₹1,00,000
- **Due Date of Payment:** 7th of the following month (monthly)
- **Assume filing after 24 months**

**Interest Calculation:**
- \( \text{Interest} = 1,00,000 \times 1\% \times 24 = ₹24,000 \)

### **Summary:**

1. **Interest:** 1% per month on the TDS amount from the date it was due until the date of payment.
2. **Penalty:** ₹10,000 to ₹1,00,000 depending on the timing of the return filing and whether any notices were received.

Ensure you calculate the exact amount for your case and consult a tax professional to assist you with accurate figures and compliance.

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