INTEREST ON TDS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 August 2010 DEAR SIR,

SALARY CREDIT ON DATED 30.04.2010 RS 92000/-AND TDS DEDUCTED RS 9200/-ON DATED 30.04.2010. AND THE SAME DEPOSITED ON 01.06.2010. HOW CALCULATED INTEREST ON TDS? 1% OR 2% & WHY

CA Sanat Pyne

CA Sanat Pyne (Expert)
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13 August 2010 your actual interest will be 3%
that is for april - june.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 August 2010 Due date of TDS remittance is 07/05/2010.
Date of remittance is 01.06/2010.
Delay is for 2 months( May and June since part of a month should be considered as a month).
Interest @ 1 % for 2 months has to be paid.

Therefore answer to the query is 2%.

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CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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13 August 2010 Interest @ 1% may be considered for may and June

reason for charging the interest for 2 month?

Interest is charged after the due date of filing of Return. This means 7th may.

Conclusin

interest shall be charged for the month of may and June ( fraction of the month is rounded up fully)

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 August 2010 Interest to be charged from the date of deduction and not from due date.

Please check the section 201(1A).

41[(1A) 42Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct 43[the whole or any part of the tax] or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at 44[one per cent for every month or part of a month] on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid 45[and such interest shall be paid before furnishing the quarterly statement for each quarter in accordance with the provisions of sub-section (3) of section 200].]

he or it shall be liable to pay simple interest at 44[one per cent for every month or part of a month] on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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13 August 2010 1 % interest for April, May & June > total 3 % will apply as the delay will be counted from the date of deduction.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 August 2010 Interest under Section 201(1A) is 1% (Till 30.06.2010 from 01.07.2010 it is 1.5%) and is payable from the date on which such tax was deductible to the date on which such tax is actually paid.

Here,
Date of Deduction 30.04.2010
Date of Payment 01.06.2010

In such case Interest payable on TDS will be 3% (From April to June).

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 August 2010 Month should be computed as from 30.04.2010 - 29.05.2010 and 30.05.2010 - 02.06.2010 so two months or as stated above 3 months as section states from date and to date so it should be calender month or actual calender month?

Section "he or it shall be liable to pay simple interest at 44[one per cent for every month or part of a month] on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid"

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 August 2010 I stand corrected. Thanks to Aditya Ji and Sanat Ji.