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Interest calculation on tds late payment

VISHAL GUPTA (MBA-Finance) (145 Points)

01 May 2013  

I want to know that If i deducted TDS on 1/4/2013 & deposited it on 20/5/2013. What is the calculation of interest for this on monthly basis i.e. 1 month delay or day basis i.e. 13 days ? Please solve my query.


 43 Replies


(Guest)

1 month delay...

1 Like

Rahul Suneja (CA-Final, CS-Exec) (210 Points)
Replied 01 May 2013

If there is any delay in depositing the amont of TDS intrest shall be charged @ 1.5% per month or part of month from the Date on which TDS was Deducted till the Actual Date of Payment.  Therefore intrest shall be charged from 01/04/2013 to 20/05/2013 i.e 2 months

4 Like

KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 01 May 2013

Originally posted by : Rahul Suneja

If there is any delay in depositing the amont of TDS intrest shall be charged @ 1.5% per month or part of month from the Date on which TDS was Deducted till the Actual Date of Payment.  Therefore intrest shall be charged from 01/04/2013 to 20/05/2013 i.e 2 months

Agreed With Rahul j


(Guest)

oops... thanks.. Learned something new...!!!

Anil Dandu (CA FINAL) (205 Points)
Replied 01 May 2013

If any delay in TDS deposit the rate of interest is 1.5% per month r part of the month.

in the above case interest is 2 months

ANKUSH GARG (CA) (21 Points)
Replied 01 May 2013

It will be for 2 months as calculation of days from date of deduction upto date of payment,and then days calculated will be considered to calculate months.

 

CA MOHIT SINGHAL (Practice) (937 Points)
Replied 01 May 2013

 

How is interest to be calculated ?

  1. Interest is to be calculated for every month or part of a month comprised in a period, 
  2. Any fraction of a month shall be deemed to be a full month 
  3. 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 
  4. 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.

Example of Interest Calculation

Date Of Payment

Date of Deduction

Due Date

Date of Deposit

Delayed Deposit

Delayed Deduction

Months

Rate

Months

Rate

05/04/2012

05/04/2012

07/05/2012

09/05/2012

2

1.50%

-

-

10/04/2012

10/04/2012

07/05/2012

09/05/2012

1

1.50%

-

-

02/07/2012

04/08/2012

07/09/2012

07/09/2012

-

-

2

1%

02/07/2012

04/08/2012

07/09/2012

15/09/2012

2

1.50%

2

1%


One Day delay may charge you Interest  @ 3 %: Suppose tax is deducted on 05.04.2012 and due date is 07.05.2012 however deposited after delay of one day on 08.05.2012.

 

Delay period in above case is : From 05.04.2012 to 08.05.2012 is one month and 3 days .As per above provisions part of the month is to be taken as full month .so delay of 2 month means 1.5 % per month fo 2 month =3 % interest . So delay of only one day of tds may cause you interest loss of three percent.
 

Rectifying Interest Default

  • You may download default/Justification report notices after logging into your TAN account at tdscpc.gov.in
  • Default Notice is a plain excel sheet without any password protection
  • If there is any default on account of non-payment or short payment of interest, you need to pay up the same
  • After paying , you have to file correction statement by including the interest payment challan.

 

5 Like

Vilas C. Rajapkar (Profession) (146 Points)
Replied 01 May 2013

In the above case interest is 2 months 

 

Here I attach Interest on TDS Calculator


Attached File : 26210 1169041 26210 51245 interest on tds calculator.xlsx downloaded: 14753 times
4 Like

CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN")   (114102 Points)
Replied 01 May 2013

Interest to be paid for 2 months...i.e., 3% of TDS amount.

 

 

For a better understanding check out below links---
 
/articles/a-day-s-delay-in-tds-remittance-interest-upto-3--6580.asp#.UYEEj7VjWbY
 
 
/experts/tds-577865.asp#.UYEFKbVjWbY
1 Like

Harshul Agarwal (n.a) (21 Points)
Replied 03 May 2013

Originally posted by : VISHAL GUPTA

I want to know that If i deducted TDS on 1/4/2013 & deposited it on 20/5/2013. What is the calculation of interest for this on monthly basis i.e. 1 month delay or day basis i.e. 13 days ? Please solve my query.

Dear, interest will calculated on monthly bases not day bases under sec. 201(1A)

 

meenu upadhyay (accountant) (21 Points)
Replied 02 July 2013

plz tell me intere amount for delay TDS amount payment for the month of May till date 194c 25317 194j 82000 194 i 50000 ?

Arun Jain (Account Professional) (479 Points)
Replied 04 July 2013

Thanks, simple and easy to use.

Sudip das (Not yet) (27 Points)
Replied 09 August 2013

what if tds was deducted on 30/4/2013 & deposited on 20/5/2013, interest to be paid for 1 month or 2month?

Luvraj (Student) (51 Points)
Replied 14 August 2013

interest on late deposit of TDS is applicable @ 1.5 % per month or part thereof.

The period for delay is taken from date of deduction to date of deposit. So, in specific cases a delay of one day may lead to pay interest @ 3 % .

Suppose: TDS deducted on 01.08.13.

In this case, due date will be 07.09.13.

If we deposit tax on 08.09.13, one day delay.

Interest will be applicable for 2 months –

From 01.08.13 (date of deduction) to 08.09.13 (date of deposit) for two months @ 1.5 % p.m=3%


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