TDS

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S RAMESH KUMAR (Querist)
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27 January 2011 Dear Experts,

TDS Deducted Date is 06.04.2010 tax Remitted on 04.08.2010, Interest caculation for How much month? 5 months or 4 monts?

Month calculated as date to date or end of the month?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 Month calculated as date to date.
4 months interest.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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27 January 2011 Mr. Adi..

Going by what you are saying... Just consider a case :
Tax deposited : 25/7/10
Tax paid : 08/08/10

What will be the penal interest ?

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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27 January 2011 Open ??????????????

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 What is the difference between tax deposited and tax paid?

If you say tax deducted then one months interest payable.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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27 January 2011 See...if TDS is deducible & is deducted on 25/7/10 & TDS is deposited on 08/08/10 >

Then going by the date to date count , there should not be any penal interest ?

In my opinion : in this case also... the interest will be 1.5 % for 25/7/10 to 31/7/10
& 1.5 % for 01/8/10 to 08/08/10.

Do you agree ?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 date to date means from 06.04.2010 - 05.05.2010 is one month. if tax paid on 08.05.2010 then two months interest will be payable. No doubt on that. Even a fraction of a month is a months delay. However month to be calculated date to date and not calendar month.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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27 January 2011 Mr. Adi.

But the point of confusion is still there !

Take my dates & the reply, what will be the answer, date to date or otherwise ? Its just a confusion which I want to get rid of...

Take the dates as : if TDS is deducible & is deducted on 25/7/10 & TDS is deposited on 08/08/10.

because.. if we go by date count, then it is not even 15 days ?

I hope you don't mind keeping this query open for too long....

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 See this link and comment
https://www.caclubindia.com/articles/a-day-s-delay-in-tds-remittance-interest-upto-3--6580.asp

My view is supported by this article also.

Guest

Guest (Expert)

27 January 2011 Month is not defined in the IT Act but there will be 5 moths as per definition of month in General Clauses Act

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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28 January 2011 Mr. Adi..

Thanks for insisting on date to date calculation.

But I am still not convinced. Take a simple example.

Payment to party was made on 25/7/10 & on the same date TDS was deducted. SO THERE IS NO DELAY IN TDS DEDUCTION.

Agree....???

Now.. the TDS has been deposited on 08/08/10. So if we interpret on date to date principle, its not even 15 days, hence there is no delay !

IS THIS WHAT YOU WANT TO SAY ?

I still stand by my conviction that the interest will be charged @ 1.5 % for 2 Months (25/7/10 to 31/7/10) & (1/8/10 to 8/8/10).

Can you please consider only my dates in the above example & reply to that only.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 January 2011 Dear All.
Under the provisions of section 201(1A) of the Act, a person is liable to pay simple interest at 1.5 per cent for every month or part of month in case of failure of payment of tax after deduction.

Now taking above examples.

Ex 1)
Tax deducted : 25/7/10
Tax deposited : 08/08/10

Due date of payment in above case is 07/08/10 if paid after that interest will be 1.5% upto 24/08/10 (i.e. upto 1 month) after that even if 1 day exceed interest will be 3% for two month(taking part in excess of one month).

Ex 2)

Tax deducted : 06/04/10
Tax deposited : 04/08/10

Due date of payment in above case is 07/05/10 if paid after that TDS 1.5% considering month basis or part in excess of 1 month.
06/04/10 to 05/05/10 (1.5%)
06/05/10 to 05/06/10 (1.5%)
06/06/10 to 05/07/10 (1.5%)
06/07/10 to 04/08/10 (1.5%)
So interest will be levied for 4 months.

Even if Tax deducted on say 31/12/10 due date is 07/01/11 after that upto 30/01/11 interest will be 1.5% p.m.
Another example--

Say TDS deducted on 1st january, 2011 Due date is 07/02/11 even though it crosses 1 month but is TDS deposited on 08/02/2011 Interest will be charged @3% i.e. for two months. as 1 month is crossed and the law say for even a part in excess of 1 month.

Hope it is clear if any further query please do ask.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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28 January 2011 Thanks.....

Its more clear now...

Aditya Maheshwari

Aditya Maheshwari (Expert)
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28 January 2011 Payment to party was made on 25/7/10 & on the same date TDS was deducted. SO THERE IS NO DELAY IN TDS DEDUCTION.

Agree....???

Now.. the TDS has been deposited on 08/08/10. So if we interpret on date to date principle, its not even 15 days, but there is delay of one month since part of a month even a day is a month 1 months interest leviable.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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28 January 2011 Agreed with the clarification.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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28 January 2011 Agreed with Sanjay Ji and Aditya Ji.
TDS Deducted Date is 06/04/2010.
i.e due date of deposit of tax is 7/05/2010
now if it is deposited on 04/08/2010
then interest will be for 4 months

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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28 January 2011 Thanks.. Mr. Bansal

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SHAILESH

SHAILESH (Expert)
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18 July 2013 ATTN ALL :

AMOUNT PAID AND TAX DEDUCTED BY ME ON 28-04-2012 AND TAX DEPOSIT ON 11-05-12. TDS AMOUNT 215/-.DELAY IS 14 DAYS. BUT IN NOTICE RECD FROM TDS CPC AND IN JUSTIFICATION REPORT DOWNLOADED FROM TDSCPS, ITS SHOWS DELAY OF TWO MONTHS AND DEMANDED INTEREST OF RS. 6/-

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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18 July 2013 Demand raised is wrong. Interest on late deposit to be paid for 1 month only @1.5% of TDS amount.

SHAILESH

SHAILESH (Expert)
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18 July 2013 THANKS SANJAYJI AND ONE MORE PROBLEM IS THAT THIER CALCULATION IS ALSO NOT MATCHING. TAX DEDUCTED 27/04/2012 AND PAID 11/05/2012 THAN ONE MONTH INT. COMES 4/- AND TWO MONTHS COME 8/- BUT THEY ARE DEMANDING 6/-.

ONE MORE:
DEDUCTION DATE 28/04/2012 AMT 2694/- PAID ON 11/05/2012. INTEREST AS PER TWO MONTHS COMES 81/- BUT THEY ARE ASKING 77/-

HOW ITS CALCULATED AND HOW ACTUAL CALCULATION SHOULD BE. THANKS IN ADVANCE

SHAILESH

SHAILESH (Expert)
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22 July 2013 query still open

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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22 July 2013 On Rs 215/- for two months @1.5% comes to Rs 6.45. So that part is ok. But interest should be payable for only 1 month. I think they are taking it on month basis. But this is not correct. For delay of 14 days how could someone be asked to pay interest of 2 months.

In second you are correct interest for two months comes to Rs 81/- but they are showing Rs 77/-. Difficult to say what mechanism they are adopting. It would be best to meet your TDS AO and get the same clarified.

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