Ques 1:TDS was deducted on 31.5.16 and deposited on 31.5.17. For interest @ 1.5% U/S 201(1A), how many months will we take?
Ques 2: In the above case, if TDS is deposited on 1.6.17 , how many months will we take?
Ques 3: TDS was deducted @ 1% (on say 50,000) on 01.05.2016 and deposited on time. However, it was required to be deducted @ 2%. Balance shortfall (i.e Rs 500) is paid on 01.06.2016. How much interest will be charged and for how many months(detailed working required).
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Int calculation u/s 201(1a)
Replies (4)
Interest is computed from the month of deduction till the month of payment. Any part of month is considered as full month. Now you can calculate accordingly
Qn.1: 12 months
Qn.2: 13 months
Qn.3: If TDS is made in 01.05.2016. Then due date for remittance is 06.06.2016. Hence you should have deposited Rs. 1000 (2% of Rs.50,000) to credit of Govt. on or before 06.06.2016. Since you have done the same, there is no liabilty for Interest u/s 201(1A).
@ Sanjay S: Could you please tell me if TDS of Rs 500 is paid on "1.6.2017", what will be the interest ?
Yes. If the TDS of Rs. 500 were to be paid on 01.06.2017, then there is a delay of 13 months, which was computed as follows:
---> Part of June 2016 = 1 month.
----> July '16 to May '17 = 11 months
-----> Part of June '17 = 1 month.
-----> TOTAL = 13 months
Hence interest = Rs. 500 x 1% per month x 13months = Rs. 65
The interest rate shall be 1% since the Tax of 1% had not been deducted at all.
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