Calculation of interest on late payment of tds

hi nikhil mehta

i m suggesting you the Example of TDS deduct and payments related case by which you can understand the every issue related with TDS deduction and interest charges for how many period

Suppose TDS was required to be deducted on 10.10.2012 and was to be paid on 7.11.2012; now

Case 1: Assessee deduct the TDS on 10.10.2012 but pays TDS on 31.12.2012. Now the interest u/s 201(1A) shall be charged from 10.10.2012 to 31.12.2012 @ 1.5% per month i.e. for 3 Months.

Case 2: Assessee failed to deduct TDS on 10.10.2013 and deducts TDS on 31.12.3012 and pays TDS on 17.1.2013, now

• Interest u/s 201(1A) shall be charged for 3 months @ 1% per month for the period 10.10.2012 to 31.12.2012.
• Interest u/s 201(1A) shall be charged @ 1.5% per month for one month from 31.12.2012 to 17.1.2013.

Case 3: Assessee neither deduct TDS nor pays TDS. In this case assessee shall be deemed to be as assessee in default u/s 201(1) for the amount of TDS not deducted, now

• the penalty for being assessee in default is upto an amount of TDS not deducted; and
• interest for assessee in default shall be levied @ 1% per month upto the date of order under section 201(1).

As per the Query you have to pad interest for the one month