I want to know how will we calculate interest for late deposit of TDS when TDS was deducted on 15/04/2013 and deposited on 05/08/2013. I have calculated interest @ 4 months at 1.5%p.m. but according to the intimation by the department they are claiming for interest of 5 months. Is this right on their part..plzz reply..Thanks in advance.
Yes Aastha, it is right on their part. Had you paid the TDS before 7/5, there would be no interest for april. But, since you paid in Aug, interest will be payable for april-august
As per sec:201(1a) of Income tax act, in case of late deposit of tds , interest shall be levied @ 1.5% per month or part of the month
Interest should be calculated from the date of deduction to the date of deposit
In this case:
Date of deduction---15/4/2013
Date of deposit------5/8/2013
Period of interest-----5months
Rate of interest-------1.5% per month or part of the month
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