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TDS on delayed payment

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V Gupta

5 Points Posted on 23 November 2021

Whether TDS is to be deducted on interest to be paid to builder for late payment of instalments/ dues?

Replies (2)

Quick Summary

This discussion clarifies whether Tax Deducted at Source (TDS) is applicable on interest paid to a builder for delayed instalment payments. The consensus is yes, if the payment is indeed interest, TDS under Section 194A must be deducted. Furthermore, the content highlights that late deposit of TDS incurs interest penalties under Section 201(1A), calculated at 1.5% per month from the deduction date to the deposit date.

Aditya Bajaj

80 Points Posted on 23 November 2021

Yes, if such payment is interest in nature, tds u/s 194A is to be deducted

debora M

BUSINESS DEVELOPMENT MANAGER

1697 Points Posted on 02 December 2021

Under Section 201(1A), in case off late deposit of TDS after deduction, you have to pay interest. Interest is calculated at the rate of 1.5% per month from the date on which TDS was deducted to the actual date of deposit. Say that your payable TDS amount is Rs 5000 and the date of deduction is 13th January.