Late paymnt intrst frm date f deducton till date of processn

This is a big issue being faced by so many people...

Income Tax will call this as Interest on late payment of Interest..

Actually if you fail to pay TDS within the due date then  you have to pay interest u/s 201 before filing of TDS return, if you fail to do so then tax paid by you will be taken towards interest which result in short payment of tax ,so again they will charge interest on that interest from date of payment of tax to date of payment of interest...

It became quite common now... 

thnxxxxxxxxxxxxxxxxx.

but no such section is thre for TDS , which says interest will be 1st adjustd....do u knw any?

There is no such section, however it is given in a CBDT circular...
I really didn't remember the circular no but i will give you that in a day...

The explanation to section 140A(1) also specifies that any part amount paid is to be first adjusted against the interest and then against the taxes due. Though this is applicable only to the said subsection, we could assume that this is the intent of the department, in charging an amount as interest on interest in respect of TDS payments too.

Hope it will clarifies..

Mr. Prasad is correct. Income tax department first adjust the payment against the interest then tax due for the period.

in such cases interest is charged from the date of deduction till the date of payment.

thanxxxxxxxx to all.....

Dear Korada devi vara prasad & Kailash Soni,

if it is the intention of the department to apply provisions of section 140A(1) to the TDS then they should have done this earlier also when defaults were not intimated through email?

??????????

No it's being followed by the IT dept from a long time...

one of my client has received a notice from dept for FY 2006-07 which contains Intest on Interst..

I think previously they included that amount of intrst of Intrst in the Interest column itself... however now they are showing that amount seperatly...

Thanks

Devi Vara Prasad

Thanxxxxxxxxxxxxxxxx Devi Vara Prasad..............................