Tds interest

How to calculate interest on late payment of tds on professional fees. Bill received on 20/02/2016 Rs. 300000/- and payment was done on 18/02/2016 without deducting tds. Tds actually deducted on 22/7/2016. How will the interest be calculated for this?
Replies (2)

Please read below -

"As per section 201, if any person who is liable to deduct tax at source does not deduct it or after so deducting fails to pay, the whole or any part of the tax to the credit of the Government, then, such person, shall be liable to pay simple interest as given below: 

  • Interest shall be levied at 1% 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 was deducted.
  • Interest shall be levied at 1.5% 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 was actually remitted to the credit of the Government.                                                                                                                                                In other words, interest will be levied at 1% for every month or part of a month for delay in deduction and at 1.5% for every month or part of a month for delay in remittance after deduction."

Therefore you have to pay Interest @ 1% for defaulted period of 6 months calculated since Feb'2016.

Hope this will clear your quries

Got it. I paid as per 1.5% interest per month and have paid excess interest so what should i do now?

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