Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2015 Amount of contractor's bill was credited on 23.1.15. Tax was deducted on 25.1.15. Is there any liability to pay interest ? If so please quote under which section.

CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)
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24 February 2015 nopes... no need because the liability to pay the tds came after the month... so no liability if u had paid that on time

Rupesh Jain

Rupesh Jain (Expert)
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24 February 2015 no intt. liability tds deducted on the entry date.

Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2015 Mr. Rupesh Jain is wrong. TDS has not been deducted on the date of entry but after two days. Rest all is ok

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Yes, there **is a liability to pay interest** in your case.

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### 📌 **Facts Recap:**

* **Contractor's bill credited** in books on: **23rd January 2015**
* **TDS deducted** on: **25th January 2015**

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### ✅ **Relevant Provision: Section 201(1A)** of the Income Tax Act

As per **Section 201(1A)**:

> If a person fails to deduct the whole or any part of the tax **at the time of credit** or **at the time of payment**, whichever is earlier, **interest is payable**.

### 💰 **Interest Applicability:**

* Interest @ **1% per month or part thereof** is payable **from the date on which tax was deductible** (i.e., **date of credit**) **to the date on which tax is actually deducted**.

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### 📅 **In your case:**

* TDS was **deductible on 23-Jan-2015**
* TDS was **actually deducted on 25-Jan-2015**
* Delay = **2 days**, but **even a single day** falls under **"part of a month"**

➡️ Hence, **interest @ 1% for 1 month** is **payable** under **Section 201(1A)(i)**.

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### ✅ **Summary:**

| Particular | Date |
| ---------------------- | -------------- |
| Entry (TDS deductible) | 23-Jan-2015 |
| TDS Deducted | 25-Jan-2015 |
| Interest Applicable | **Yes** |
| Interest Rate | 1% per month |
| Section | **201(1A)(i)** |

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Let me know if you'd like help calculating the exact interest amount or creating a draft payment entry.

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