About interest on tds payment
This query is : Resolved
16 November 2013
ONE OF MY CLIENT IS DEDUCTED THE TDS 194C ON 30.04.13 AND THE DUE DATE FOR TDS PAYMENT IS 07.05.13 BUT THE TDS IS PAID ON 17.05.13 AS IT IS DELAYED ONLY FOR 10 DAYS BUT THE DEPT IS CHARGED INTEREST FOR 2 MONTHS @ 1.5% PER MTH. THE QUERY IS THAT WHETHER WE WILL HAVE TO PAY THE AS PER OUR CAL.I.E. FOR 1 MONTH OR AS PER THE DEPT CAL. ? PLEASE GUIDE ME.
17 November 2013
Department is calculating interest from the date of deduction to date of payment by further applying the fiction month or part of the month. So for this delay-2 months interest is being charged by the department. though it is highly unreasonable.
26 November 2013
Sir Both of you are in correct view. I also have the same query. Here in this case from 30-04-2013 (Date of Deduction) to 29-05-2013 only one month is delayed and the challan also deposited on 17-05-2013 with in that one month i.e 29-05-2013. Then how it came to 2 months late payment calculation by the department. So we have to communicate this with department officials.
27 November 2013
How two months interest is being charged when you deduct tax on 30.04.2013 and pay on 01.05.2013 ?
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It's a ridiculous provision. Unluckily, it's there in the law and our FM as well as Parliament has passed it.
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From the date of deduction 30.4.2013 means from 30.4.2013. You have been caught for the month of April.
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Upto date of deposit i.e. 01.05.2013.
You have again been caught by the month of May.
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One day in each month is the part of the respective month. So in this way
A 24 HOUR GAPE CAN BE EQUIVALENT TO 2 MONTHS - AS PER SECTION 201(1A)
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It's a ridiculous provision. Unluckily, it's there in the law and our FM as well as Parliament has passed it.
.
From the date of deduction 30.4.2013 means from 30.4.2013. You have been caught for the month of April.
.
Upto date of deposit i.e. 01.05.2013.
You have again been caught by the month of May.
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One day in each month is the part of the respective month. So in this way
A 24 HOUR GAPE CAN BE EQUIVALENT TO 2 MONTHS - AS PER SECTION 201(1A)
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27 November 2013
SECTION 201(1A): Without prejudice to the provisions of sub-section (1), if any such person, deducting fails to pay the tax, he or it shall be liable to pay simple interest, " at one and one-half per cent 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 is actually paid" This is the Provision in IT Act. In this Girish sir Case, TDS Deducted on 30-04-2013 and Remittance Date was 17-05-2013. Only 18 days were late including Deducting date and remittance date. Then how 2 months Interest asked by the It department is thinkable.
09 December 2013
Paras Bafna sir, My client Dedcuted TDS on 31-03-2013 and remitted ii on 11-05-2013 instead of 30-04-2013. So u/s 201(1A) 2 months late remittance. But Department asked interest for 3 months in Defaults Downloaded. How it is possible? How can I get this information to TDSCPC? Is there any mistake with TDSCPC calculation system? Lot of Confusion.
09 December 2013
Your query has already been answered.
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Still, let us calculate in the departmental way-
Your client deducted TDS on 31.03.2013.
Its the date od deduction. Under the provisions interest starts from the date of deduction.31.03.2013 has not been left from the No of Months calculation. March 2013 is the part of the month....count it as month number 1. (A single day is a part of month.)
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For April ..you should not mind.
Count it as month number 2.
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Interest luckily stops on the day when you deposit the tax i.e. on 11.05.2013. Again a part of the month.
Count it as month number 3.
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Hope the above reply will be satisfactory ?
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Still, let us calculate in the departmental way-
Your client deducted TDS on 31.03.2013.
Its the date od deduction. Under the provisions interest starts from the date of deduction.31.03.2013 has not been left from the No of Months calculation. March 2013 is the part of the month....count it as month number 1. (A single day is a part of month.)
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For April ..you should not mind.
Count it as month number 2.
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Interest luckily stops on the day when you deposit the tax i.e. on 11.05.2013. Again a part of the month.
Count it as month number 3.
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Hope the above reply will be satisfactory ?
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09 December 2013
Bafna sir, now it is clear. Thank you.
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