If a company makes an advance payment on 1st day of a month but does not deducts tax and if the bill has been booked by the company in the middle of that month ,say, 15th of that month and deducts tax deposit it before 7th of next month.
Now i just want to know that whether the company is liable to pay interest for late deduction of tax @ 1% though the due date of depositing tax in both cases (if he deducts on advance payment or deducted on booking of bill) is same and the company has deposited the tax before due date and there is no loss to Revenue.
29 May 2011
Very Nice Query... No interest will not be levied. But had the TDS been deposited on 8th due date would have been calculated from the date of advance payment. And interest would have been applicable for two months. 1 month @1% for late deduction and 1 month @ 1.5% for late deposit. Views of other experts are also welcomed on this.
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