TDS

This query is : Resolved

MD.AKHTARUZZAMAN ANSARI (Querist)
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10 February 2011 SIR PLZ HELP IN CALCULOATING THE INTEREST FOR THE FOLLWINGS
1.FOR THE MONTH OF
2.DATE OF PYMENT & DEDUCTION
3.AMOUNTS
1 2 3
Sep-10 6-Oct-10 827.00
Oct-10 3-Nov-10 827.00
Nov-10 10-Dec-10 809.00
Dec-10 8-Jan-11 824.00
Jan-11 6-Feb-11 827.00
PLZ HELP IN THIS REGARD

chetan soni

chetan soni (Expert)
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10 February 2011 Payments due for the month of Nov & Dec are late. The interest will be chargeable for 1 month in each of case. The current interest rate is 1.5% per month.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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10 February 2011
Under the provisions of section 201(1A) of the Act, a person is liable to pay simple interest at 1.5 per cent for every month or part of month in case of failure of payment of tax after deduction.

Now taking above examples.

Ex 1)
Tax deducted : 25/7/10
Tax deposited : 08/08/10

Due date of payment in above case is 07/08/10 if paid after that interest will be 1.5% upto 24/08/10 (i.e. upto 1 month) after that even if 1 day exceed interest will be 3% for two month(taking part in excess of one month).

Ex 2)

Tax deducted : 06/04/10
Tax deposited : 04/08/10

Due date of payment in above case is 07/05/10 if paid after that TDS 1.5% considering month basis or part in excess of 1 month.
06/04/10 to 05/05/10 (1.5%)
06/05/10 to 05/06/10 (1.5%)
06/06/10 to 05/07/10 (1.5%)
06/07/10 to 04/08/10 (1.5%)
So interest will be levied for 4 months.

Even if Tax deducted on say 31/12/10 due date is 07/01/11 after that upto 30/01/11 interest will be 1.5% p.m.
Another example--

Say TDS deducted on 1st january, 2011 Due date is 07/02/11 even though it crosses 1 month but is TDS deposited on 08/02/2011 Interest will be charged @3% i.e. for two months. as 1 month is crossed and the law say for even a part in excess of 1 month.

Hope it is clear if any further query please do ask.

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