Tds penalty charges
This query is : Resolved
20 June 2012
What will be the penalty charges (%) monthly if I have to pay the TDS for 2011 and 2012 back dated liabilities. Its TDS on Services rendered by WHQ (Out of India) to Indian Company.
CA PRAVEEN SINGH
(Expert)
20 June 2012
Presently, if TDS Return is submitted late, penalty is charged @ 100/- per day as per section 272A. Penalty amount is limited to maximum of TDS amount. Practically, this penalty is not imposed in any case due to lengthy procedure to charge penalty. According to new rules applicable
interest is 18% per annum.
interest is 18% per annum.
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20 June 2012
Hello Sir,
Thnaks a lot! But does this means that we can pay 18% of the Total TDS amt per annum ?
Thnaks a lot! But does this means that we can pay 18% of the Total TDS amt per annum ?
CA PRAVEEN SINGH
(Expert)
20 June 2012
IF YOU DOES NOT DEPOSIT TDS ON DUE DATE OR BEFORE,THEN YOU HAVE TO DEPOSIT TDS WITH INTEREST 1.5% PER MONTH.
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21 June 2012
Hello Sir,
Please help me understand the calculation.\
Inv booked on 15-Sep-2011
Inv Amt- Rs 1,74,258/-
TDS was applicable but not deducted.
Now TDS needs to be paid on the invoice.
SO TDS is : 10%+2%+1% of 174258=17,949/-
Interest on it would be 10 mths if TDS paymt can be done in next month cycle only.
Therefore Interest will be 1.5% X 10 months X 17949.00=2692.00
Is this calculation correct?
Please help me understand the calculation.\
Inv booked on 15-Sep-2011
Inv Amt- Rs 1,74,258/-
TDS was applicable but not deducted.
Now TDS needs to be paid on the invoice.
SO TDS is : 10%+2%+1% of 174258=17,949/-
Interest on it would be 10 mths if TDS paymt can be done in next month cycle only.
Therefore Interest will be 1.5% X 10 months X 17949.00=2692.00
Is this calculation correct?
27 July 2025
Yes, your calculation method for the interest on delayed TDS payment is basically correct. Here’s the detailed explanation:
### Interest on Late Payment of TDS:
* **Interest rate:** 1.5% per month (or part of a month) of the TDS amount.
* **Period:** From the date when TDS was supposed to be paid (usually the date of deduction or due date) up to the actual date of payment.
* Interest is calculated on the **amount of TDS payable** (not on the invoice amount).
---
### Your example:
* Invoice amount = Rs. 1,74,258
* Total TDS (10% + 2% + 1%) = Rs. 17,949 (assumed correct based on your rates)
* Delay = 10 months
**Interest = 1.5% × 10 months × Rs. 17,949 = Rs. 2,692.35**
---
### Summary:
* The **1.5% per month** interest applies on the TDS amount due, for each month of delay.
* Penalty under section 272A (Rs. 100/day) can also apply but is usually not levied strictly.
* You must deposit the TDS amount **plus interest** to regularize the payment.
---
### Interest on Late Payment of TDS:
* **Interest rate:** 1.5% per month (or part of a month) of the TDS amount.
* **Period:** From the date when TDS was supposed to be paid (usually the date of deduction or due date) up to the actual date of payment.
* Interest is calculated on the **amount of TDS payable** (not on the invoice amount).
---
### Your example:
* Invoice amount = Rs. 1,74,258
* Total TDS (10% + 2% + 1%) = Rs. 17,949 (assumed correct based on your rates)
* Delay = 10 months
**Interest = 1.5% × 10 months × Rs. 17,949 = Rs. 2,692.35**
---
### Summary:
* The **1.5% per month** interest applies on the TDS amount due, for each month of delay.
* Penalty under section 272A (Rs. 100/day) can also apply but is usually not levied strictly.
* You must deposit the TDS amount **plus interest** to regularize the payment.
---
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