Interest on late payment of 'interest on tds'

Please provide details for Interest on Interest for TDS

I have also received many such notice. Please provide the provisions for the same. It states Late Payment Interest Amount and Interest on late payment of interest about which I dont have any idea.

@ Siddhi....... Our cases are still pending. No one even in department knows under which provision they charged Interest on Interest on 'Late Payment'. 

Dear Deepak,

There is no specific section but its like general practices being followed by income tax department now a days. Its like they treat Interest payable not being paid with TDS as tax payable and issue demand notice for such delay in payment of Interest payable.

Regards

Amit Mehta

@ Amit Mehta... But what is the vailidity of this practice? Interest is itself a payment for delayed submission of tax... In this way one can argue that they can further levy interest on 'Interest on late payment of Interest'. And this can go upto infinity????????

Hi Team,

I am also have same problem of Interest on Interest from demand notice received from IT Dept. can anybody clarify my query and please quote the Notification Number if any. ?

Regards,

Giridhar.D

09840201857

IThe rate of interest are follows under section 201 read with rule 31A

1% from the date the tax was deductable to the date on which such tax is deducted 

1.5% from the date oon which such tax is deducted to the date on which such tax is actually paid 

procedure how have to follows

make request to ITO to give extract of data along with the calculation of interest

compare with actual data filled by you i.e.Tds return 

in case you have find shortfalls of deposit in you hand please pay right now & after that revised the retunr

Dear friends,

Revised interest rate for  late payment of TDS is 1.5% Per month W. E.F. 01.07.2010.also partially month is considered as full month for payment of interest so there is not any provision for calculation of interest for days.

suppose a deductor deduct TDS on 01.01.2012 buit  he\she deposited to government on 18.02.2012

then he\she has to pay interest for fully 2 months @ 1.5% per month.

Thanks!

you don't have to pay interest on interest as it is unjustified and bad in law. So just pay the demand of Interest on late payment and don't pay the demand of Int. on Int. and convey the same to I.T.O. (TDS) through a written formal letter.

Thanks for suggestion for Sandeep. I have done this last month where interest on interest was not paid but i am not sure whether ITO or system close this demand. Since no one knows under which section they charge interest on interest, Is there any problem in a system for interest calculation ?

In section 201 of the Income-tax Act, for sub-section (1A), the following sub-section shall be substituted with effect from the 1st day of July, 2010, namely:—

“(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,—

(i) at one per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent. for every month or part of a month on the amount of such taxfrom the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200.”.

Suhas, this section talk about simple interest payable in deduction default & tax payment default.

I didnt find any section which covers provison of interest on late payment of interest.

As per my last post i filed revised return with payment of interest till date of late payment of TDS and not paid interest on interst.

Now that default got revised resulted demad for interet on interest till date of process.

Dear members plese share your experience related this issue and and also provide your valuable opinion on this.

Thanks,