Interest calculation on late TDS deposit

Sir, i had deducted tds .01% as per certificate for 194C & 194I(b) but same is consumed & return error

now dedcuted tds .1% for the period of Oct'23 Nov & Dec,

Pls help me its Interest rate for late deposit is 1.5%pm and calculate Interest for Oct 4 month(Oct-to Jan), Nov -3 m/o & Dec 2 month for file revised return. Thanks

Replies (5)
Quick Summary
This discussion clarifies the interest calculation for late TDS deposits. The interest rate is 1.5% per month, with any part of a month counting as a full month. This applies when TDS was deducted but deposited late, calculated from the deduction date to the deposit date. It's important to distinguish this from scenarios where TDS wasn't deducted at all, which has a different interest rate.

Interest calculation on late deposit of tds possible

Interest is calculated at the rate of 1.5% per month from the date on which TDS was deducted to the actual date of deposit. Note, that this is to be calculated on a monthly basis and not on the number of days i.e. part of a month is considered as a full month

Thanks, kindly help for tds short dedcuted in Oct'23 month now interest calculated 4 month as am filling return in Jan'24

https://officeanywhere.io/incometax/tds-interest-calculator#:

There are other calculators online. 

Section 201(1A) has TWO different interest scenarios, often confused with each other.

Scenario 1 ,  TDS was deducted on time but deposited LATE:
Interest rate: 1.5% per month or part of a month on the amount not deposited.
Period: from the date of deduction to the actual date of deposit.

Scenario 2 ,  TDS was NOT deducted at all (or deducted short):
Interest rate: 1% per month or part of a month on the undeducted amount.
Period: from the date the TDS was deductible to the actual date it was deducted.

Key rules for calculation:
- Part of a month is treated as a full month. So if you deducted on March 1 and paid on March 25, that is 1 full month at 1.5%.
- Interest is simple (non-compounding), calculated on the TDS amount that was delayed.
- Interest is paid along with TDS using Challan 281. Use Nature of Payment code that matches the original section.

Example: You deducted TDS of Rs 10,000 on April 5 and deposited on June 12. Duration: April 5 to June 12 = 3 months (April, May, and part of June = 3 full months). Interest = Rs 10,000 x 1.5% x 3 = Rs 450.

For the full TDS compliance calendar and penalty framework, Tax Garden offers [TDS filing and compliance services](https://taxgarden.in/services) that include interest calculations and late deposit management.

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