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Dhaval

Dhaval (Job)     22 August 2013

Interest u/s 201(1a) for late payment.

No, the demand is not correct. It should be for 1 month only. Read section...

[(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,—

(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from 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:]

According to me you should pay interest only for 1 month and you should write a letter to dept. attaching challan that "We have made interest payment for only 1 month according to the provisions of section 201(1A)(ii)"

 

 



 15 Replies

NAGASAI.K

NAGASAI.K (Article Assistant)     21 August 2013

Interest on late deposit of TDS is calculated from the date of deduction to the date of deposit @ 1.5% per per month or part of the month

1 Like
Aman

Aman (Finance Professional)     21 August 2013

YA demand is correct because u have deposited the TDS after due date in may for the month of april... now u have to pay interest @ 1.5%p.a for 2 month i.e april & may both will included as full month because part of the month of the is also considered as full month as per provisions....

1 Like
Pearl

Pearl (CA)     21 August 2013

I have a query. TDS has been deducted in April but remitted in July without interest on late payment. Client plans to remit that interest later during the year. Whether any interest charges are applicable on the said non remitted Interest for 4 months??   

1 Like
PASUPATHY PARAMAGURU

PASUPATHY PARAMAGURU (CA FINAL)     21 August 2013

As per my view, tax deposited on 8th may, but due date is 7th of may, even if the one day delay considered as part month, accordingly interest should also to be calculated @ 1.5% for one month, not for the two months. Dear experts pls correct me if my answer is wrong
2 Like
Vikas Aggarwal

Vikas Aggarwal (CA )     22 August 2013

Demand is correct absolutely

1 Like
Ramanuj

Ramanuj (Accountant.)     22 August 2013

Mr. Goal

 

Demand is Correct you will have to be paid  as soon as possible. one day delay have to be paid 2 months of delay . so you have paid 3% as interest.

 

Ranu Purohit

Ranu Purohit (Job)     22 August 2013

Yes...Demand is Correct.Kindly read the provision..'IF the tax is not deducted from the date to deduction of TDS to the date of deposite/payments of TDS intrest payble will be one and half percent per month or part of month.So you have to pay the Intrest for the month of April & May both.

 

Thanks/Regards,

1 Like
Ranu Purohit

Ranu Purohit (Job)     22 August 2013

Originally posted by : PASUPATHY PARAMAGURU
As per my view, tax deposited on 8th may, but due date is 7th of may, even if the one day delay considered as part month, accordingly interest should also to be calculated @ 1.5% for one month, not for the two months. Dear experts pls correct me if my answer is wrong


Dear, kindly read the provision it's clearly said that intrest payble for the month and part of the month from the actual payment.so in the above case April is also the first month and respective may is the (part of) month hence he is liable to pay two months intrest.

Thanks/Regards,

PASUPATHY PARAMAGURU

PASUPATHY PARAMAGURU (CA FINAL)     23 August 2013

Thanks for your correction Dear Ranu Purohit.

 

As per Section 201 (1a) interest shall be

"at one and one-half per cent. for every month or part of a month on the amount of such tax from 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.”
 

As per demand , interest was calculated correctly.

 

Pearl

Pearl (CA)     27 August 2013

Suppose I deduct Rs. 1000 as TDS April and remit Rs. 1000 ONLY in June. ie., without interest on such delay remittance. If  the relevant interest portion is being paid in September, what are the consequences?

Interest for 2 months alone to be paid? or shall be calculated til August? or any interest on interest is applicable?

How to deal with such a situation??

 

Deepak Jain

Deepak Jain (Article Trainee)     27 August 2013

Guyzz I have one more query in reference to above.

If TDS has been deducted in month of MAY for the month of APRIL and deposited in may month..then whats penalty and interest...

sakthi

sakthi (Student CA IPC / IPCC)     03 March 2014

i have damand for tds for q3 f.y2013-14 for late payment ( tds amount is124021)

actually payment date is 15jan2014 but i was paid 18 jan2014 they sent interest on deduction 201(1A) amount is3819 how they calculte this interest amount. i check with 3% but this not get i got 3721. plz answer immedatly sir

 


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