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Interest on TDS

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Reeyaz Razak

25 Points Posted on 28 April 2020

Suppose A has availed the advertisment service from B,payments made to B does not exceeded the amount of Rs 1,00,000 however for the month of Mar 2020 total invoice value exceeded Rs 1 lakh...then A have to deduct tds for all transactions during the year and deposit it by 30th April 2020...whether A have to pay interest for late deduction of TDS on transactions for the period April 2019-Feb 2020?

Replies (3)

Quick Summary

This discussion clarifies when interest is payable on Tax Deducted at Source (TDS). If an advertiser's total payments to a service provider exceed Rs 1 lakh in March, TDS must be deducted on all transactions for the year. However, the liability to deduct TDS arises in March, meaning no interest is typically payable on transactions from April to February.

Kiran Hathalia

460 Points Posted on 29 April 2020

As per section 201(1A) of the Act, any person who is required to deduct the tax 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,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.

In the given case the liability to deduct TDS arises in the month of March since the threshold of 100,000 is exceeded in the same month and hence no interest liability for any previous months.