Tds on interest
This query is : Resolved
13 November 2013
Dear Professionals,
I went through the conversations and articles for Interest for late depositing TDS amount.
Period of delay is calculated from date of deduction instead of Due date.
My query is,
If the period of delay is less then 1 month then also, interest of 2 months shall be charged?
For Example,
Deduction : 22-08-2013
Due date : 07-09-2013
Deposit date : 08-09-2013
In this case,
I am charged 2 months interest in justification report downloaded from TRACES.
Is it correct?
I went through the conversations and articles for Interest for late depositing TDS amount.
Period of delay is calculated from date of deduction instead of Due date.
My query is,
If the period of delay is less then 1 month then also, interest of 2 months shall be charged?
For Example,
Deduction : 22-08-2013
Due date : 07-09-2013
Deposit date : 08-09-2013
In this case,
I am charged 2 months interest in justification report downloaded from TRACES.
Is it correct?
13 November 2013
What ever you have written is correct. All are paying interest. No body is questioning the provision.
13 November 2013
I am sorry Shivang,
The interest is calculated from the date it was deductible!!
The interest is calculated from the date it was deductible!!
14 November 2013
Shri Nikhil Kaushik and Shri Paras Bafna
Thank you for reply. I do understand that interest is calculated from date of deduction.
How 1 month is calculate from date of deduction?
Is it 30 days from date of deduction or calendar month is considered?
Thank you for reply. I do understand that interest is calculated from date of deduction.
How 1 month is calculate from date of deduction?
Is it 30 days from date of deduction or calendar month is considered?
27 July 2025
Great question! Here’s a clear explanation about how interest on late TDS deposit is calculated under the Income Tax Act:
---
### Interest on Late Deposit of TDS (Section 201(1A)):
* Interest is charged at **1% per month** or part of a month on the **amount of TDS not deposited**.
* The **period of delay** is calculated from the **date of deduction** of TDS till the **date of actual deposit** with the government.
---
### How is the period of delay counted?
* The Act and CBDT circulars clarify that **any part of a month is counted as a full month**.
* So even a delay of **1 day beyond the due date counts as one full month of interest**.
* Interest is thus charged for **every calendar month or part thereof** during which the TDS amount remains unpaid.
---
### In your example:
| Event | Date |
| ------------ | ----------- |
| TDS Deducted | 22-Aug-2013 |
| Due Date | 07-Sep-2013 |
| Deposit Date | 08-Sep-2013 |
* The TDS should have been deposited **on or before 07-Sep-2013**.
* Since deposit was made **on 08-Sep-2013** (one day late), this counts as a delay of **1 full month** (from 22-Aug to 22-Sep).
* Additionally, since the payment date is beyond the due date, interest for the part of September is also counted.
* Therefore, interest is calculated for **2 months**:
* 1 month from date of deduction (22-Aug to 22-Sep)
* Plus 1 month for the delay past due date (07-Sep to 08-Sep), counted as a full month.
---
### Summary:
* Interest on late deposit of TDS is **calculated from date of deduction**.
* **Any part of a month delay is counted as a full month**.
* Hence, even a 1-day delay results in interest for 2 months in your case.
---
### Practical tip:
To avoid paying interest, always deposit TDS on or before the due date notified by the government (usually 7th or 30th of the next month depending on deductor type).
---
If you want, I can help calculate exact interest for your case or share official CBDT circular references! Would you like that?
---
### Interest on Late Deposit of TDS (Section 201(1A)):
* Interest is charged at **1% per month** or part of a month on the **amount of TDS not deposited**.
* The **period of delay** is calculated from the **date of deduction** of TDS till the **date of actual deposit** with the government.
---
### How is the period of delay counted?
* The Act and CBDT circulars clarify that **any part of a month is counted as a full month**.
* So even a delay of **1 day beyond the due date counts as one full month of interest**.
* Interest is thus charged for **every calendar month or part thereof** during which the TDS amount remains unpaid.
---
### In your example:
| Event | Date |
| ------------ | ----------- |
| TDS Deducted | 22-Aug-2013 |
| Due Date | 07-Sep-2013 |
| Deposit Date | 08-Sep-2013 |
* The TDS should have been deposited **on or before 07-Sep-2013**.
* Since deposit was made **on 08-Sep-2013** (one day late), this counts as a delay of **1 full month** (from 22-Aug to 22-Sep).
* Additionally, since the payment date is beyond the due date, interest for the part of September is also counted.
* Therefore, interest is calculated for **2 months**:
* 1 month from date of deduction (22-Aug to 22-Sep)
* Plus 1 month for the delay past due date (07-Sep to 08-Sep), counted as a full month.
---
### Summary:
* Interest on late deposit of TDS is **calculated from date of deduction**.
* **Any part of a month delay is counted as a full month**.
* Hence, even a 1-day delay results in interest for 2 months in your case.
---
### Practical tip:
To avoid paying interest, always deposit TDS on or before the due date notified by the government (usually 7th or 30th of the next month depending on deductor type).
---
If you want, I can help calculate exact interest for your case or share official CBDT circular references! Would you like that?
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