Interet calculation on late payment of tds ?

PLease see the attached link and download the file. It will calculate the interest required for the specific period.

 

TDS calcultor and Interest @ 1% & 1.5%

Dear all

I Thank & agreed with above all, But now a day defaults files available by NSDL which are along with interest calculation,  

Which containing two column of interest, one for delay in depositing tds amount and another for Interest on Interest amount whereas already TDS deposited without interest,

Is this method of Calculating of interest on interest is correct?

please suggest under what section they are collecting interest on interest amount?

&

How do we show interest amount in the challan while making payment? 

Hi Ramya,

The Overall period is less that 3 months, and as far as I know ITD calculate interest at the higher rate for the whole month if two rates are applicable (and not on the basis of number of days for each period). In the present case they will certainly calculate interest @ 1.50% for the part which fell after 30.06.2011, and for the balance period interest will be calculated @ 1%. So Out of total 3 months delay, 1.50% will be for July portion and for the balance period (3 months Less 1 month), interest will be @ 1%. But in any case it would be quite useful if fresh default file is procured from ITD.

Regards

CA Kanwaljit Singh Dhunna

Interest @ 1.5% per month for 3 months is to be calculated and paid since the Interest will be chargeable from the date of deduction of tax which is from 14-04-2010 and will be calculated on a monthly basis as follows -

1. 14-04-2010 to 13-05-2010 - 1 month;

2. 14-05-2010 to 13-06-2010 - 1 month; and

3. 14-06-2010 to 12-07-2010 - 1 month.

Interest is to be paid for a month or part thereof which means that even if there is delay for a single day then Interest on TDS will be chargeable for the entire month. It is not based on number of days of delays but months for which there is delay in payment of TDS.

In your case, even if TDS was paid on 15-06-2010 then also Interest is to be paid for 3 months.

Dear Kiran Ji,

Why the Interest @ 1.50%, even when the rate applicable upto 30.06.2010 was 1% per month ?

Regards

CA Kanwaljit Singh Dhunna

Dear All

All of you have to keep in mind the provisions of Rule 119A of Income-tax Rules, 1962 while calculating interest.

Best Wishes

Sathikonda

Dear Kanwal

You are right. 

D/All,

i want to know that if tds is deducted on 14.4.10 and deposit on 12.7.10 then it is a case of tax actually ddeducted to date on which actually paid the int @ 1.5  is applicable then why 1% is applicable can u give resons why this @ 1% , plz corect me if am. I think interst will be levied for 3 months

SECTION 201(1A) — Failure to deduct whole or any part of tax deducted at source or failure to deposit tax deducted at source THEN w.e.f. 1-7-2010 If Tax is not deducted (a) from the date of tax deductible to the date of deduction interest payable will be one per cent per month or part of month. (b) from the date of deduction of TDS to the date of deposit/Payment of TDS Interest Payable will be one and half per cent per month or part of month.SECTION 201(1A) — Failure to deduct whole or any part of tax deducted at source or failure to deposit tax deducted at source THEN w.e.f. 1-7-2010 If Tax is not deducted (a) from the date of tax deductible to the date of deduction interest payable will be one per cent per month or part of month. (b) from the date of deduction of TDS to the date of deposit/Payment of TDS Interest Payable will be one and half per cent per month or part of month.

@ manish only 1.5% ll come & its for 4 month not for 3 months evry part or full month considered as full month :) 

Dear Vishal,

You must read the act as a whole and not in parts. We should interpret different provisions of the law harmoniously and not separately. If the law is amended w.e.f. 01-07-2010, is it a fault of the assessee ? Should he be penalised for that ? Food for thought :)

Regards

CA Kanwaljit Singh Dhunna

My company has been receiving notices U/s 200A  for late payment of TDS. I have paid the interest amount as soon as the default email is received by me through mail from tin-nsdl. Still the dept is sending notice regarding interest payment till date of processing. How do I calculate the amount to be paid as interest from date of processing till date of actual payment of interest?

For eg: Date of deduction 1/3/12           Date of Deposit   20/3/12           Due date 7/3/12        Amt Rs.4000/-

Late payment int till date of deposit of Tax Rs.100/-     

Late payment Interest from date of deposit of tax till date of processing (24/4/12)   Rs.3/-

What will be late payment int from date of processing (24/4/12) till date of actual payment  (14/5/12)

Dear Sir,

Suppose I have deducted TDS Rs. 1000 as on 23.01.2012 & the same is paid on Challan tender date on 04.04.2012 without paying interest & now I want to pay the interest part, so should I calculate interest @ 1.5% for 2 months i.e Rs.30 or 4 months as on today  i.e. Rs 60/- or Rs.30/- + 30*1.5%*2 = Rs.31/-.

Please suggest me as I am confused.

 

You have deducted tds 23.1.2012 and diposited on 04.04.2012 then you liable to pay interest for 4 month upto 04.4.12 i.e. from jan12 to april12.

Hence, interest liability will be Rs. 60.

 

Dear Sony,

Interest will be calculated for 3 months.

23.01.2012-22.02.2012 - 1 Month

23.02.2012-22.03.2012 - 1 Month

23.03.2012-04.04.2012 - <1 Month treated as 1 Month

@ 1.50% for 3 months - 45 Rs.