Interest on late payment of interest for tds

Hi Friends,

We have received a Demand  Notice  under  Sec 156 of  the  Income Tax Act  that  they  charged  two  coloums of  Interest . i. e.   1) Amount of Interest payable  2 ) Amount of  Interest on Interest

The first one  is  1.5% calculated for default of month  with  Taxable amount.  but  second one,  on what basis did they charge such interest.

Anyone  pls  help and tell the calculation for second  one.

Selvam

 

Replies (1)

There is no provision in IT Act to charge interest on interest. Neither 201 nor 220 provides on this. True, department is sending such demands. You should file a stay on demand and appeal with CIT Appeals.

Please update us the course of action initiated by your goodself.

Regards,

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