Calculation of interest on tds

Dear Harshvardhan the demand is absolutely correct.....as per TDS provisions interest should br calculated  @ 1.5% for a month or part of the month....in ur case tds for the month of march deposited in may after 07.05.2012 hence interest is calculated for 3 months march april & may..... one month is completed on last day of the month...not day wise (30 days) as per calculation of Manikanth....hope it is clear to you n other members who calculate a month daywise....

Dear Aman

 

Why will it take the month of March, I think the liabilty will start from the next day.

 

No harshvardhan,  the last day of march will be included as tds deducted on that day & also as per sec 201(1A) interest is calculated from the date of deduction not from next date to the date of deduction...

interest on late deposit of TDS is 1.5% for every month or part thereof from the date of deduction & not from the due date of deposit. There are in fact four easy ways to earn interest on fixed deposits and keep it too.

Section is very clear and there is no dispute regarding the calculation.

1 day constitutes 1 month. Hence 31 March is = 1 month

April and May are two months......

So in total interest is payable for three months.

If needed case laws can be provided

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