Interest on tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 if TDS is deducted on 1st April & the same has been deposited on 30th may, then interest will be charged for how many months?

Also, if TDS is deducted on 30th april & has been deposited on 30th may , then interest will be calculated for how many months?

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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12 June 2013 IN BOTH THE CASES INTEREST HAS TO BE PAID FOR ONE MONTH I.E FOR THE MONTH OF MAY.

Rupesh Jain

Rupesh Jain (Expert)
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12 June 2013 DEDUCTED ON 1 APRIL THEN DUE DATE 7 MAY
THEN 1 MONTH 1.5% INTT, WILL CHARGE

DEDUCTED ON 30 APRIL DUE DATE IS 7 MAY
THEN 1 MONTH 1.5% INTT WILL BE PAY

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Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 but as per law
"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)"

so for 1st case: 1st April - 1st may 1 month
2may - 30th May - 2nd month.. interest for 2months

in 2nd case- 30th april- 30th may..int for
1Month

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 so interest is to be calculated for 1month or 2months??

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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12 June 2013 SIR THE INTEREST IS TO CALCULATED FROM THE DUE DATE OF DEPOSIT OF TDS SO INTEREST IS TO CALCULATED FOR ONE MONTH ONLY.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 June 2013 As per law, month or part of the month is considered as a full month.
.

So, in my view calculation done by you may be modified as -

1st month will be from 1st April to 30th April and 2nd month from 1st May to 30th May.
.
But, in this particular case, department will go on due date basis, so pay interest for only 1 month.
.

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 But in law its written interest is to be calculated from the "DATE OF DEDUCTION" and not "Date of Due Date" to Date of Tax Deposited..@1.5 PM or Part thereof..

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Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 So sir, in 1st case I should calculat interest for 2 months & for 2nd case, only for 1month..Correct?

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 Kindly reply asap..thanks

Ganeshbabu K

Ganeshbabu K (Expert)
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12 June 2013 Dear author

Please refer Section 201(1A)(ii)

Reproduced here for your reference

(ii) 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,

Solution:-

Intrest on TDS is to be caluculated from the period from date of deduction to date of deposit of tds to the credit of government.

So

1)2 months interest @ 1.5% pm

2)1 month interest % 1.5% pm

Thanks & regards
Ganesh babu k

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 June 2013 YOU ARE ABSOLUTELY CORRECT, AS PER LAW.
.
What is being suggested is on the basis of professional prudence. The matter may be left on the department to raise interest demand.
.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 thanks a lot :)