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Interest on late deduction of tds

Dhaval (Job) (794 Points)

24 August 2016

In case of my company amount of 50,000 was credited to the party's account for section 194C on 05-07-2016. But at that time TDS was not deducted.

However, TDS of 500 was deducted at the time of payment of 49,500 to the party on 25-07-2016.

Does in this case interest u/s 201(1A) is applicable for late deduction?

(In my view it is not applicable as TDS was deducted in the same month. But I am not sure, Kindly reply)

Thanks.

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5 Replies

komal choudhary (none) (133 Points)
Replied 24 August 2016

yes, as tds should be deducted on the date of payment or amount credited in account whichever is earlier.

so this is a case of late deduction of tds hence the same will be liable to pay interest @ 1% per month or part thereof.

ACA Anurag (Enjoy the little things) (14706 Points)
Replied 24 August 2016

Dear dhaval,

Tds should be deducted on the date of payment but u have deducted late hence late penalty is applicable

Kindly like if my forum has helped you

Originally posted by : Dhaval

In case of my company amount of 50,000 was credited to the party's account for section 194C on 05-07-2016. But at that time TDS was not deducted.

However, TDS of 500 was deducted at the time of payment of 49,500 to the party on 25-07-2016.

Does in this case interest u/s 201(1A) is applicable for late deduction?

(In my view it is not applicable as TDS was deducted in the same month. But I am not sure, Kindly reply)

Thanks.