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Interest on late payment of tds

Vivek (Finance Professional) (73 Points)

21 December 2013

Hi friends, Lets consider the following scenario.

The Customer deposited the TDS in the bank on 06/12/2013. However, the banker remitted the TDS to govt. on 07/12/2013 at 11:30 pm in the night. Therefore, the transaction was only saved and processed the next day i.e, 08/12/2013.

In this case, does the banker have to pay penalty of 1.5% towards late payment of TDS. If yes, will it be for one full month or just pro rata days (assume, the banker will pay on 23/12/2013) i.e, is the interest applicable for only 16 days or full month.

Please, treat the matter urgent and reply.

Also, what challan needs to be filled online while paying TDS and under what section, does the TDS have to be deposited.

Help appreciated.

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5 Replies

GAUTAM SHARMA (Audit Assistant) (353 Points)
Replied 21 December 2013

Can you tell me how TDS was deposited i.e. cheque or cash

Vivek (Finance Professional) (73 Points)
Replied 21 December 2013

The Bank Customer deposited Cash on 06/Dec/2013.

But, the banker paid through Internet Banking on 07/Dec/2013 midnight at 11.00pm. The transaction was processed on 08/Dec/2013 morning by IT Department.

Also, similar case happened on 07/Aug/2013 also. The transaction was processed on 08//Aug/2013.

What will be interest in the above two scenarios.

Actually, my brother is the banker. He recently joined and is not aware of these nitty-gritties.

Can he claim waiver of interest.

Vivek (Finance Professional) (73 Points)
Replied 21 December 2013

The Customer deposited TDS on 06/Aug/2013 by cash. The Bank remitted the TDS to Govt. through Internet Banking on 07/Aug/2013 in the midnight at 11.00 pm. But, the transaction was processed on 08/Aug/2013. The total TDS amount was 3,15,000/-. Only one day delay because of cut-off timing.

Again same scenario.

The Customer deposited TDS on 06/Oct/2013 by cash. The Bank remitted the TDS to Govt. through Internet Banking on 07/Oct/2013 in the midnight at 11.00 pm. But, the transaction was processed on 08/Oct/2013. The total TDS amount was 2,40,000/-. Only one day delay because of cut-off timing.

Again same scenario.

The Customer deposited TDS on 06/Dec/2013 by cash. The Bank remitted the TDS to Govt. through Internet Banking on 07/Dec/2013 in the midnight at 11.00 pm. But, the transaction was processed on 08/Dec/2013. The total TDS amount was 5,20,000/-. Only one day delay because of cut-off timing.

Kindly, let me know the interest and penalty for the above 3 cases.

Can the banker seek waiver for it.

Help appreciated.

CA Abhishek Goyal (Chartered Accountant) (504 Points)
Replied 21 December 2013

As per my opinion,one of my client paid TDS amount on 5th of Oct 2013 by cheque bt On the OLTAS application the same challan amount apper on the 8th october i.e after due date of the payment of TDS. so the notice is come for 2 months late payment Interst.TDS deducted on 16/09/2013...Deptt. consider the late payment on month basis. E.g. TDS deducted on september bt same was deposited on 8th Oct. than they will consider 2 months for late payment in TDS.