INTEREST ON TDS

This query is : Resolved

DARSHAN (Querist)
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14 March 2009 IF ASSESSEE HAS DEPOSITED THE PAYMENT OF TDS AFTER OF 7TH OF NEXT MONTH SO WHAT IS RATE OF INTEREST ON THAT

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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14 March 2009 interest is calculated @ 1% p.m. or part there of on amount of such tax from date on which such tax was deductible to the date on which tax is actually paid.

section 201(1A) and 206C(7).

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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14 March 2009 1% per month or the part of month. eg if TDS for Febtuary is deposited after 7th March,in March then intt shall be 1%. If it is deposited in April then rate shall be 2%

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Reetika Goel

Reetika Goel (Expert)
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14 March 2009 Hey, Interest on late deposit of TDS is 1% per month or a part thereof and that too is calculated from the date of deduction.

For example:
If you have deducted TDS on 05.05.2008, you are supposed to deposit it with Govt. by 7th of June' 2008. But if you fail to deposit it by 7th of June and deposits the same on 10.06.08, then your interest calculation shall be as follows:

Period of interest: 06.05.08 to 10.06.08
Comprising one complete month & 4 extra days

Therefore, effective interest rate shall be 2%.

Hope you got your answer in right spirit.
For further clarifications mail me at ca.reetika_goel@hotmail.com