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Interest on tds
please tell me the calculation of interest on tds.
specially months calculation, whether the deduction date month will be taken whole or daywise calculated.
Replies (4)
Interest will be calculated from date of deduction to the date of payment on monthly basis @ 1.5%. (1.5% X No.of months X TDS amount).
In other words :
When TDS is not paid by its due date, then interest should be charged from the date of "PAYMENT" and not from the date of "DUE DATE"
Also.. Even a part of month is taken as a FULL month.
To know in details about how to calculate period of default and interest, see below link. The same is discussed at length.
I have recd a notice from department and according to their calculation :
Date of deduction 30/03/13
Date of deposit of challan 06/06/13
They calculated the months as 4 months and we talked to traces helpcentre they said march month will be taken full and also the june month , and the same calculation is in justification report.
Thats correct, cause as per the act even the part of the month (which can be interpreted a day also) will be taken as a full month.
and Hence March, April May & June = 4 months are taken
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