Interest calculation on late TDS deposit

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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)
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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