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Interest calculation on late deposit of tds

sanju (Accountant) (348 Points)

31 October 2012

Dear friends,

Amount paid to contractor on 1/10/2012.

tax deducted at source on the same day.

so due date for deposit of tax is 7/11/2012

but deposited on 20/11/2012

so my doubt is whether interest is calculated for the period of 7/11/2012 to 20/11/2012

1/10/2012 to 20/11/2012?

please Answere me friends.

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7 Replies

Yash Gokani (Article Assistant) (47 Points)
Replied 31 October 2012

Interest is to be paid from the date of deduction,here from 1st october upto 20th november i.e for 2 months where part of the month is considered as full month @ 1.5%pm

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Yogesh Kumar (Job) (180 Points)
Replied 31 October 2012

For late deduction of Tax deduction at source

period date from tax deductible to date of actual deduction

rate 1 % per month or part thereof)

For late deposit of TDS after deduction

period :date from tax deducted and date of actual deposit

rate 1.5 % per month or part thereof

So as per above you are liable to pay interest @ 1.5% per month for two months.

1 Like

Raghavendra B. kuber (Accounts Executive) (88 Points)
Replied 01 November 2012

Dear All, My doubt is whether interest is calculated for the period of 7/11/2012 to 20/11/2012 only becoz of dated 07-11-2012 due date of deposit mandatory without interest and after 07-11-2012 to it apply to interest,so interest is paid only for 14 day's not to 2month And can any bady tel me why interest paid 2 month

Yogesh Kumar (Job) (180 Points)
Replied 01 November 2012

As per section 201(1A)(ii), in case of late deposit after deduction of TDS the interest will be paid @ 1.5% for the month or the part of the month and period will be "date from tax deducted (October 01,2012) till date of actual deposit (Nov 20, 2012)".

So as mentioned above you need to pay interest for 2 months @ 1.5% per month.

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Sumit Middha (Head (Fin.& A/c) M.COM M.A.(Eco) MBA CS Final) (2453 Points)
Replied 01 November 2012

Originally posted by : Yogesh Kumar
	As per section 201(1A)(ii), in case of late deposit after deduction of TDS the interest will be paid @ 1.5% for the month or the part of the month and period will be "date from tax deducted (October 01,2012) till date of actual deposit (Nov 20, 2012)". So as mentioned above you need to pay interest for 2 months @ 1.5% per month.