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Interest on TDS u/s 194c

Ria Saraf (CA final student) (110 Points)

16 June 2010

The bill amount is Rs 22713, Rs23926 and Rs22327 dated 16th March 2010. I have yet to deposit the TDS u/s 194c. Can u calculate and tell me how much TDS is to be deposited along with the interest and surcharge.
It is u/s 194C.

Thanks

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13 Replies

CA VINAY BANSAL (In job with KPMG) (289 Points)
Replied 16 June 2010

Originally posted by : Ria Saraf

Dear Ria,

U have to pay 2% of sum of amount plua interest at the rate of 1% per month or part of the month (in ur case for june only) of the amount of TDS.

Thanks

1 Like

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 16 June 2010

Dear Ria,

u need to pay the tax along with the Interest @ 1% p.m.

However if u would have accrued/booked the same invoice on 31st of march then the time limit would have been 2 months from 31st march i.e. 31st May.

& u would have paid the interest for the month of june @ of 1% only.

sunil

2 Like

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 16 June 2010

I would like to correct vinay because for the extention of time to 31st may one has to accru/booked the invoice/expense on the last day of the March

Pls read the Note no.2 in the attached file

sunil

Attached File : 4 notes to tds rules.pdf downloaded: 271 times

2 Like

Ria Saraf (CA final student) (110 Points)
Replied 16 June 2010

if suppose i had accrued the expense on 31.03.2010 then i will have to pay interest for only one month i.e. June or from April 2010-June 2010 i.e.for 3 months?

Shyam Lal Naik (Service) (6156 Points)
Replied 16 June 2010

The rate of TDS shall be 1%(in case the deductee is indivisual/HUF) and 2% in any other case. No surcharge & Cess. It is assumed that the bills are credited on 31/03/2010. The TDS is deposited today(ie 16/06/2010)

The interest is payable from the date deductible(31/03/2010) to the actual date of payment(16/06/2010). There is a delay of 77 days. In months terms it transpire to 2 months and 17 days. You have to pay interest for 3 months @ 1% per month.

1 Like

Ria Saraf (CA final student) (110 Points)
Replied 16 June 2010

thanks so much i got it and i made the tds payment also.

Abhishek (CA FINAL) (119 Points)
Replied 16 June 2010

MR SHYAM LAL NAIK............I THINK THE CALCULATIONS MADE BY U IS SOMEHAT MISLEADING.......

AS U HV SAID THAT TDS DEDUCTED ON LAST DAY I.E 31ST MARCH AND PAID ON 16/6/2010 THEN THERE IS A DELAY OF 77 DAYS.............WHICH I THINK IS NOT TRUE..............AS PER INC-TAX ACT, IF TDS IS DEDUCTED ON LAST DAY THEN ONE MUST PAY IT WITHIN THE PERIOD OF 2 MONTHS I.E, 31ST MAY AND HENCE THE INTEREST PENALTY FOR LATE PAYMENT OF TDS I.E, ON 16/6/2010 IS ONLY OF 16 DAYS.......I.E, ONE MONTH AND HENCE INTEREST WILL BE CHARGED AT 1% ON TDS AMT TO BE DEPOSITED.....................

Shyam Lal Naik (Service) (6156 Points)
Replied 17 June 2010

Dear Abhishek,

The relevant section is Section is 201(1A), which, prior to amendment vide Finance Act, 2010, read as under.

"(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 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 actually paid and such interest shall be paid before furnishing the statement for each quarter in accordance with the provisions of sub-section (3) of section 200"

In terms of the said section, interest shall be payable from the date on which tax was deductible(ie 31/03/2010) rather than from the last date on which tax was payable(ie 31/05/2010).

Ashish J. Mehta (Assistant Manager Accounts & Taxation) (26 Points)
Replied 17 June 2010

I Think Mr. Shyam lal is correct.......

Abhishek (CA FINAL) (119 Points)
Replied 17 June 2010

ok...........Mr shyamlal ..........now i got that..............this was quite surprising actually..........and yes surely i was wrong about it...............great work..........

vinay sharma (CA final (Article)) (327 Points)
Replied 17 June 2010

Is there any penalty for late filling of TDS return after 15june for 4th qtr.?

MANGESH (PROPRIETOR) (23 Points)
Replied 20 June 2010

In either case the expenses would be disallowed and added to the income ??

Siddharth (Article assistant) (21 Points)
Replied 22 June 2010

According to me Mr. Shyam is wrong .As per the provision of TDS, if tds credited in the books of a/c on 31st MArch then one can pay the said dues within 2 months ie. 31th may .