28 June 2010
Dear all, If a Company is not paid the TDS for the year 2009-10. If it pays it in July 2010 then 1.5% of interest is applicable from due date or from july 1st 2010
28 June 2010
Interest on late payment of TDS, is applicable at following rates by simple interest rate method.
A) period prior to 01.04.08 interest is chargeable @ 12 per cent per annum.
B) after .01.04.08 interest is chargeable @ 1 per cent for every month or part of the month ,means full month interest will be charged for fraction period of month
other points
while calculating interest TDS amount payable on which interest is to be calculated (principal amount) should be rounded of to nearest multiple of 100 ignoring fraction of Rs.100. Interest will be charged on the amount payable form the date on which such tax deductible to the date of actual payment. Means while calculating period for interest purpose ,the period prescribed for making the payment to the credit of central government is not to be excluded. Interest liability is absolute and mandatory and should be deposit through self assessment and assessing officer can not exempt from interest liability. With effect from 1.6.2006 ,this interest must be paid on self assessment basis by the person every quarter before furnishing the quarterly return.(form 24Q/26Q/27Q)
Now ,why I am saying one day dealy cost you 2%???
As per point 2 ,if Tds has been paid late then interest will be applicable
from the date of deduction of TDS/date on which Tds is Deductible To date of actual payment of TDS. Suppose we have deducted TDS from a person on date 01.01.2009 u/s 194C .As per Chart shown above payment due date for deposit is 7.02.09 and if we have made payment on 8.02.09 then Interest will be applicable from date of deduction ,as while calculating period for interest on late deposit of tds ,period prescribed for making payment to the credit of Central government is not to be excluded.so Interest period will be calculated as under.
01.01.2009 to 01.02.09-One month. 02.01.2009 to 08.02.09-part of month =one month so interest for two month @ 1% /per month will becomes 2% ,so delay for one day cost you 2%?!!!
CAclubindia
