Interest On TDS under section 201(1A)

This query is : Resolved

Gaurav Raj (Querist)
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24 February 2025 I saw a TDS return of a client where the Date of Payment was 30th August, 2022, Date of Deduction was 30th August, 2022 as well and Date of Deposit was 07 October, 2022.
He got intimation under section 201(1A) for payment of interest of 3 months delay.
Shouldn't it be 2 months, Sept and oct?

Please Help.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 February 2025 In case of delay, the part of month of deduction of TDS (here August) is also counted.

Gaurav Raj

Gaurav Raj (Querist)
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24 February 2025 But in some intimation where the payment and deduction date is 30th November and deposited date is 07 January in that case the intimation is only for 2 months. Why the difference in the treatment of same thing.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 February 2025 Interest for failure to deduct tax at source/delay in payment of TDS
As per section 201, if any person who is liable to deduct tax at source does not deduct it or after so deducting fails to pay, the whole or any part of the tax to the credit of the Government, then, such person, shall be liable to pay simple interest as given below:
> Interest shall be levied at 1% 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 was deducted.
> Interest shall be levied at 1.5% 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 was actually remitted to the credit of the Government.
In other words, interest will be levied at 1% for every month or part of a month for delay in deduction and at 1.5% for every month or part of a month for delay in remittance after deduction.

You may verify the amount on TDS interest calculator ::
https://incometaxindia.gov.in/Pages/tools/interest-for-delay-tds-tcs-tool.aspx

Gaurav Raj

Gaurav Raj (Querist)
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24 February 2025 I read that. But why there is difference in calculating interest using same provisions. If we consider the provision even in the case of 30th November, 3 months should be considered for interest. But they considered only 2.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 February 2025 For 30th month, there is no part of month left; had it been 29th November, it would calculate for November also.