Income tax

Page no : 2

(Guest)

please friends dont confuse with giving so many answers.

It is a staright question and answer is 420/-

Be cause, Here TDS is Deducted and if it is not decudted the 1% pm is the interest rate.

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IMRAN KHAN (CA FINAL ) (41 Points)
Replied 26 December 2011

Hi Mr Sunil,

Your interest computation u/s-201 of IT Act is correct if Tds has already been deducted in April month.

The provision of Sec-201 is as follws:

From the date on which Tds was deductible to actual date of deduction - 1% pm or part thereof

From the date of deduction to date of remittance- 1.5%pm or part thereof

For example:-

Bill relates to April

Tds deducted in October month

And remitted in December month

Sol: Then interest u/s-201 shall be (3500*1%pm*7month)+(3500*1.5%pm*3month)

=Rs.402.5

So based on your deduction compute on your own

IMRAN KHAN (CA FINAL ) (41 Points)
Replied 26 December 2011

Hi Sunil,

The two rate prescribed is due to the reason that

If you have not deducted- you will be paying interest @ 1%pm

But if you have deducted and not remmited, then you will be paying interest at more rate ie. 1.5%pm

CA Kiran Sutrave (CA) (428 Points)
Replied 29 December 2011

If TDS was deducted in April 2011 itself then Interest is Rs. 473/- (Rs. 3,500*1.5%* 9 months). Interest will be calculated for 9 months starting from April 08, 2011 to December 25, 2011.

If TDS was not deducted in April 2011 and is deducted and paid in December 2011 then Interest is to be calculated @ 1% for 9 months on Rs. 3,500/- and 1.5% on TDS for a month which will be Rs. 368/-.