CA Deepak Gupta (In Practice) (81 Points)
07 September 2011Dear All
I have received a notice from Income Tax Department asking me to pay Additional Interest on TDS over and above which I have paid while making late payment of TDS. Furhtermore they have charged Interest on 'Late Payment of Interest' about which I dont know anything.
Kindly provide me provisions in Income Tax Act regarding payment of interest on Late Payment of TDS as well as provisions regarding Interest on 'Late Payment of Interest'. (A.Y. 2010-11)
Warm Regards.
CA Deepak Gupta
(In Practice)
(81 Points)
Replied 08 September 2011
Please provide details for Interest on Interest for TDS
CA Siddhi
(PRACTICE)
(257 Points)
Replied 17 October 2011
I have also received many such notice. Please provide the provisions for the same. It states Late Payment Interest Amount and Interest on late payment of interest about which I dont have any idea.
CA Deepak Gupta
(In Practice)
(81 Points)
Replied 05 November 2011
@ Siddhi....... Our cases are still pending. No one even in department knows under which provision they charged Interest on Interest on 'Late Payment'.
amitmehta_ca
(CA, CMA)
(99 Points)
Replied 05 November 2011
Dear Deepak,
There is no specific section but its like general practices being followed by income tax department now a days. Its like they treat Interest payable not being paid with TDS as tax payable and issue demand notice for such delay in payment of Interest payable.
Regards
Amit Mehta
CA Deepak Gupta
(In Practice)
(81 Points)
Replied 05 November 2011
@ Amit Mehta... But what is the vailidity of this practice? Interest is itself a payment for delayed submission of tax... In this way one can argue that they can further levy interest on 'Interest on late payment of Interest'. And this can go upto infinity????????
GIRIDHAR
(Sr. Associate - JV Finance)
(31 Points)
Replied 27 December 2011
Hi Team,
I am also have same problem of Interest on Interest from demand notice received from IT Dept. can anybody clarify my query and please quote the Notification Number if any. ?
Regards,
Giridhar.D
09840201857
CA Kumar Mukesh
(CA CMA FINAL and Advance Excel Trainer)
(6881 Points)
Replied 27 December 2011
IThe rate of interest are follows under section 201 read with rule 31A
1% from the date the tax was deductable to the date on which such tax is deducted
1.5% from the date oon which such tax is deducted to the date on which such tax is actually paid
procedure how have to follows
make request to ITO to give extract of data along with the calculation of interest
compare with actual data filled by you i.e.Tds return
in case you have find shortfalls of deposit in you hand please pay right now & after that revised the retunr
CA Siddhi
(PRACTICE)
(257 Points)
Replied 10 January 2012
CA SANTOSH SAH
(CHARTERED ACCOUNTANT)
(183 Points)
Replied 18 January 2012
CA Sandeep Tibrewal
(Practice)
(34 Points)
Replied 19 April 2012
you don't have to pay interest on interest as it is unjustified and bad in law. So just pay the demand of Interest on late payment and don't pay the demand of Int. on Int. and convey the same to I.T.O. (TDS) through a written formal letter.
CA Vijay
(Manager Finance)
(110 Points)
Replied 25 April 2012
Thanks for suggestion for Sandeep. I have done this last month where interest on interest was not paid but i am not sure whether ITO or system close this demand. Since no one knows under which section they charge interest on interest, Is there any problem in a system for interest calculation ?
C.A. M.Com. Suhas A. Nagpure
(CA)
(1175 Points)
Replied 25 April 2012
In section 201 of the Income-tax Act, for sub-section (1A), the following sub-section shall be substituted with effect from the 1st day of July, 2010, namely:—
“(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,—
(i) at one per cent. 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 is deducted; and
(ii) at one and one-half per cent. for every month or part of a month on the amount of such taxfrom the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200.”.
CA Vijay
(Manager Finance)
(110 Points)
Replied 25 April 2012
Suhas, this section talk about simple interest payable in deduction default & tax payment default.
I didnt find any section which covers provison of interest on late payment of interest.
CA Vijay
(Manager Finance)
(110 Points)
Replied 02 May 2012
As per my last post i filed revised return with payment of interest till date of late payment of TDS and not paid interest on interst.
Now that default got revised resulted demad for interet on interest till date of process.
Dear members plese share your experience related this issue and and also provide your valuable opinion on this.
Thanks,
CAclubindia
