Did not deducted tds and now want to deduct and deposit

This query is : Resolved

CA Sudeep Singh (Querist)
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29 March 2017 A company is paying EMI (Principal+Interest) to a finance company since 2014-15 up to current F.Y. 2016-17 but the company has not deducted TDS ever on interest part. Now the company wants to deduct TDS on interest portion i request you to kindly advise me under which section company should deduct TDS and what are penal charges which has to be borne by the company for not deducting and depositing TDS. Whether it will attract interest on delayed payment of TDS or it will also attract penal charges for not deducting TDS ever.

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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29 March 2017 TDS on interest paid to financial institutions should be deducted as per section 194A i.e@ 10% if interest payment in whole year is more than Rs. 10,000 (if PAN number is available)

Now provision for non deduction of TDS
As per section 201 interest is divided in two parts
- 1% per month or part of the month(part of the month is also treated as full month) from date it is liable for deduction till date of actual deduction)
- 1.5% per month or part of the month(part of the month is also treated as full month) from date of deduction and date of payment.