IT System Auditor
33683 Points
Joined April 2010
If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201. Sub-section (1A) of section 201 lays down that such person shall be liable to pay simple interest
Example of Interest Calculation
|
Date Of Payment
|
Date of Deduction
|
Due Date
|
Date of Deposit
|
Delayed Deposit
|
Delayed Deduction
|
|
|
|
|
|
Months
|
Rate
|
Months
|
Rate
|
|
01/04/2010
|
01/04/2010
|
07/05/2010
|
09/05/2010
|
2
|
1%
|
-
|
-
|
|
09/04/2010
|
09/04/2010
|
07/05/2010
|
09/05/2010
|
1
|
1%
|
-
|
-
|
|
01/07/2010
|
04/08/2010
|
07/09/2010
|
07/09/2010
|
-
|
-
|
2
|
1%
|
|
01/07/2010
|
04/08/2010
|
07/09/2010
|
15/09/2010
|
2
|
1.50%
|
2
|
1%
|
Interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month The amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated.