Tds interest confusion

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This query is : Resolved

Dipan (Querist)

30 March 2014 I have deposited TDS on 14/10/13 and due date was 07/10/13 i have been sent notice and the interest levied for late payment is for 2 months while I cannot understand that after due date I.e. after 07/10/13 upto 13/10/13 legally 1 month interest can be charged @1.5% then why interest is charged for 2 months? What is the basis of calculation of period?

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)

30 March 2014 Hi Dipan,

The period of late deposition of TDS is calculated not from the due date of deposition of TDS but from the date on which TDS is deducted.

Example,

TDS deducted on 7th Sep-2013.
But deposited with govt. on 8th Oct-2013.

Here interest on late deposition of TDS will be for 2 months (3%) even though TDS is deposited late by one day.

From 7th sep to 6th oct = 1 month
7th oct to 8th oct = 1 month (part thereof)
thus 2 month interest will be levied.

Regards,
Devanand

Nikhil Kaushik

Nikhil Kaushik (Expert)

30 March 2014 the interest is calculated for two months as the computation is based on calender month.

For payments made in September, the due date is 7 October. if you pay after 7 october, the interest shall be computed for part of September as one month and part of october as second month resulting in two months.

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