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Interest on late payment of tds

22 June 2013

Dear All,

I have received an intimation from TRACES regarding interest on late payment of TDS.

I booked the TDS on 30July 2012 & the amount deposited on 21st august 2012. I paid interest on TDS amount for 1 month @ 1.5%. But as per the justification report downloaded from the TRACES, interest should be paid for 2 months.

Please advise.........

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18 Replies

CA Kedar Sakhardande (Proprietor) (942 Points)
Replied 23 June 2013

Yes they are correct

interest is payable from the date of booking/accrual till the period of deposit. (for a month or part thereof)

In your case, you need to pay for July & Aug

manish kukreti (d) (30 Points)
Replied 23 June 2013

Thanks for your reply sir,

but still I am a little bit confused because there are some posts according to which interest should be calculated and deposited on days basis.

here is the link for the same.

/forum/interet-calculation-on-late-payment-of-tds--191377.asp

What should I do?

Should I calculate interest on days basis or on month basis........ ?????

Waiting for your reply...

bujjulu (e-TDS + IT return filer Hyderabad) (718 Points)
Replied 23 June 2013

Rule position is -you have todeposit by 7 th of the following month.

If you do not then the interest will be calculated from the date of booking till the date of deposit of the deducted amount.

In you case you have failed to deposit by 7th of the following month, then the interest will be calculated from the date of booking to the date of payment .

In your case they are NOT correct.. as the between the date of booking and date of payment 30 days havew not elapsed.

2 Like

Ashok Katarmal (Manager Accounts) (75 Points)
Replied 24 June 2013

If you have missed provided time limite, then you have to calculate on monthly basis ie. if due date is 7th july and you have paid on 1st augutst, you have to pay for 2 months.

manish kukreti (d) (30 Points)
Replied 24 June 2013

Sir, TDS deducted on 30th july due date was 7th aug but the tds deposited on 21st aug.......

then for how much month interest should be calculated?????????

bujjulu (e-TDS + IT return filer Hyderabad) (718 Points)
Replied 24 June 2013

Dear Mr.Manish,

Date of Deduction is 30th July Due date is 7th Aug. Date of Payment is 21st Aug.

Now having failed to pay by 7th of the following month you have top calculte from the date of deduction (I.e. booking) only 22 days have elapsed.August yopu have crossed 1 month then for months you have to .

But in the present case you have not exceeded on month time.

(Please do not confuse the dates between date of deduction to the date of payment and

the 'date of due' to the date of payment)

CA Ramsai N (Fresher) (594 Points)
Replied 24 June 2013

Originally posted by : manish kukreti
	Sir, TDS deducted on 30th july due date was 7th aug but the tds deposited on 21st aug....... then for how much month interest should be calculated?????????

If anybody fails to pay with in due date, the due date is not criteria for calculating interest on late payment.

Here in this case...

Interest calculation is follows::

Period ::Date of Tax deducted to Date of actual deposite (interest @ 1.5% p.m or part there of)

TDS is deducted but no deposited with in due date

TDS deducted 30 th July - Part of July month

TDS deposited on 21st Aug - Part of Aug month

Therefore 2 months interest

Note :: Month means one calander english month and not period of 30 Days

Ref::/experts/meaning-of-month-or-part-of-month-for-calculating-interest-80836.asp

1 Like

bujjulu (e-TDS + IT return filer Hyderabad) (718 Points)
Replied 24 June 2013

will verify with the default notices downloaded and get back.

(will it not take few days time)

CA Nilamani Mohanty (Finance Manager) (100 Points)
Replied 24 June 2013

totally agreed with Mr.Ramsai

tme s limted,bt drms r unlmtd (Mba ( fin.) Ca final Student) (257 Points)
Replied 24 June 2013

it should be one month not two month

manish kukreti (d) (30 Points)
Replied 24 June 2013

lots of confusion.........

bujjulu (e-TDS + IT return filer Hyderabad) (718 Points)
Replied 24 June 2013

The clarification in the link given lead to experts column - il.e. the opinion given in 2008.

Now the justification given is not logical without any reference to rule OR Law in the ACt.

Secondly part of the month means Clendar month of 30/31 days + fraction of the month CAN'T be in which month the deduction is made and the payment made.

If what is given above is correct. I should say the dept. is looting most unscrupulous menthods.