Urgent TDS
This query is : Resolved
08 June 2011
Sir,
1 invoice 11030.00 (194J) of the month May but tds not be deposit till yesterday if today i will be deposit then what the amount will be deposit as interest??
1 invoice 11030.00 (194J) of the month May but tds not be deposit till yesterday if today i will be deposit then what the amount will be deposit as interest??
08 June 2011
What is the exact date of TDs deduction & actual date of payment or credit ?
08 June 2011
You will be liable to pay interest for the month of May & June both @ 1.5%p.m. for each month
Interest
11030 * 3% = 331/-
Total Amt. Payable with interest = 11030 +331 = 11361/- Rs.
Interest
11030 * 3% = 331/-
Total Amt. Payable with interest = 11030 +331 = 11361/- Rs.
08 June 2011
Interest will be calculated on TDS amount (1103) NOt the Invoice amount.
if the payment or credit to party has happened on or after 09/05/2011, then interest will be Rs. 17/-. Total : 1103+17 > 1120.
if the payment or credit to party has happened on or before 08/05/2011, then interest will be Rs. 33/-. Total : 1103+33 : 1136/-
if the payment or credit to party has happened on or after 09/05/2011, then interest will be Rs. 17/-. Total : 1103+17 > 1120.
if the payment or credit to party has happened on or before 08/05/2011, then interest will be Rs. 33/-. Total : 1103+33 : 1136/-
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08 June 2011
I do not completely agree with CMA S K Jha as regards the different treatment illustrated by him while calculating interest for the dates of the same month.
As per Rule 30 , payment or credit made as on 01.05.2011 and as on 31.05.2011 will have the same due date and that will be 07.06.11.
However the amount of Rs 1136/ as suggested by him can be deposited as on today for the compliance.
As per Rule 30 , payment or credit made as on 01.05.2011 and as on 31.05.2011 will have the same due date and that will be 07.06.11.
However the amount of Rs 1136/ as suggested by him can be deposited as on today for the compliance.
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08 June 2011
Mr. Paras.
What you are saying is correct as per rules till 30.6.10, when month were to be calculated on calendar month pattern, however w.e.f 1/7/10, the rules have changed. Please read the exact wordings of the provision :
Interest from 01.07.2010
For late deduction of Tax deduction at source-(period date from tax deductible to date of actual deduction )(rate 1 % per month or part thereof)
For late deposit of TDS after deduction (period :date from tax deducted and date of actual deposit)(rate 1.5 % per month or part thereof)
What you are saying is correct as per rules till 30.6.10, when month were to be calculated on calendar month pattern, however w.e.f 1/7/10, the rules have changed. Please read the exact wordings of the provision :
Interest from 01.07.2010
For late deduction of Tax deduction at source-(period date from tax deductible to date of actual deduction )(rate 1 % per month or part thereof)
For late deposit of TDS after deduction (period :date from tax deducted and date of actual deposit)(rate 1.5 % per month or part thereof)
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08 June 2011
Sorry Vaibhav I just misread it. I thought that 11030 was the TDS amount & now I completely agree with CMA Subhash Kumar
08 June 2011
Dear Mr. Subhash,
I am thankful to you for the updates and further seek your opinion in the interpretation more particularly of
the second clause of Section 201(1A) which follows as under -
"For late deposit of TDS after deduction (period :date from tax deducted and date of actual deposit)(rate 1.5 % per month or part thereof)"
Suppose in the above case, where payment has been made without TDS on 10-05-2011, but tax is being deducted as well as deposited today i.e. on 08-06-2011.
From Date to Date theory No of Days will be Zero between the Deduction Date and Payment Date.
Q 1. Whether the assessee is liable to interest @ 1% or 1.5% ?
(as per Section 201(1A)clause(i) will apply)
Q.2A- Whether Interest is required to be paid when the deduction and payment are at the same point of time?
Q.2B. Whether Interest for part of the month for 0 day will be leviable at the rate of 1.5%. (Clause (ii)will apply here)
I am thankful to you for the updates and further seek your opinion in the interpretation more particularly of
the second clause of Section 201(1A) which follows as under -
"For late deposit of TDS after deduction (period :date from tax deducted and date of actual deposit)(rate 1.5 % per month or part thereof)"
Suppose in the above case, where payment has been made without TDS on 10-05-2011, but tax is being deducted as well as deposited today i.e. on 08-06-2011.
From Date to Date theory No of Days will be Zero between the Deduction Date and Payment Date.
Q 1. Whether the assessee is liable to interest @ 1% or 1.5% ?
(as per Section 201(1A)clause(i) will apply)
Q.2A- Whether Interest is required to be paid when the deduction and payment are at the same point of time?
Q.2B. Whether Interest for part of the month for 0 day will be leviable at the rate of 1.5%. (Clause (ii)will apply here)
09 June 2011
Dear Mr. Paras,
Strictly going by the word to word interpretation, I would conclude that in the scenario given by you,
Q1 > 1%
Q2A > Yes, 1% for late deduction.
Q2B > No interest will be payable for late deposit.
Again.. this is purely my opinion & interpretation, I would be happy to see if other contradictory opinion in this case come out.
Strictly going by the word to word interpretation, I would conclude that in the scenario given by you,
Q1 > 1%
Q2A > Yes, 1% for late deduction.
Q2B > No interest will be payable for late deposit.
Again.. this is purely my opinion & interpretation, I would be happy to see if other contradictory opinion in this case come out.
09 June 2011
The reason for my above interpretation >
When this notification w.e.f 1/7/10 came, the logic was given that many assessee tends to deduct TDS at the time of payment to a party, yet they keep the amount with themselves & deposit the same in government treasury , very late.
The IT deptt. just to discourage this sort of practice, came with this amendment : 1.5 %.
But see the exact words :
late deposit of TDS after deduction.
That means, this they intend to apply this 1.5% scene only in cases where the deduction is already made & being deposited late in govt account.
When this notification w.e.f 1/7/10 came, the logic was given that many assessee tends to deduct TDS at the time of payment to a party, yet they keep the amount with themselves & deposit the same in government treasury , very late.
The IT deptt. just to discourage this sort of practice, came with this amendment : 1.5 %.
But see the exact words :
late deposit of TDS after deduction.
That means, this they intend to apply this 1.5% scene only in cases where the deduction is already made & being deposited late in govt account.
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09 June 2011
Thank you again for the nice and balanced reply.
In nutshell it can be said that when TDS at all has not been deducted at the time of payment /credit, it will bear interest @ 1% till the date of deduction.
If the TDS so deducted on a later date, it should be shown in the accounts on the day of its deposition. As such, no further interest will be chagred.
However, delay of a single day after late deduction will attract interest @ 1.5%.
In nutshell it can be said that when TDS at all has not been deducted at the time of payment /credit, it will bear interest @ 1% till the date of deduction.
If the TDS so deducted on a later date, it should be shown in the accounts on the day of its deposition. As such, no further interest will be chagred.
However, delay of a single day after late deduction will attract interest @ 1.5%.
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10 June 2011
Yes, agree with this interpretation.
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