but i think the interest is payable @ 1% p.m. not as 12% p.a..

e.g. TDS was to be deposited by 7th September for the month of August but he actually deposited it on 10th October to the account of central government. In this case, he would be charged interest @ 2% on the amount of TDS default.

Members, please give your comments, whether i am right or not.

 Mr Arora is right - Penalty provisions goes as below:

Sec 201, which is mandatory and states that interest @ 1% p.m. or part of the month is payable from the due date of deduction & deposit of TDS to the date of actual payment. 

Sec 221 provides for a maximum penalty of the amount of TDS which is optional.

Yes Mr. Arora is right.

1% p.m. penalty shall be levied if assess default to deposite TDS within the sepcified time period (i.e. 7th of following month ) and

Deductor shall be treated as "Assess in default"

To All Fellows,

my ques is whether expenses is allowable in same year where asseessee subsequently make the default good(i.e. deduction of TDS on contract payments and deposititng the same along with penal interest)????

sir, if we deduct tds and deposit after 12 months from due date,, then what i wll have to do..................

because i have receive notice from dept u/s 276B. please guide me