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Interest on TDS

aniket (Accountant) (561 Points)

26 May 2009

Dear All

How to Calculate interst on TDS,

If my TDS payable for the month of April Rs 149286/- Due Date 07/05/2009

Paid on 15/05/2009

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6 Replies

RAMANJU (here to updating the knowledge) (485 Points)
Replied 26 May 2009

1% per month or part month. so, it is 1% of 149286.

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aniket (Accountant) (561 Points)
Replied 26 May 2009

as per ur calculation

149286*1/100=1493/-

Rs 1,493/-

one of the expert clarifies that

149286 R Off 149300

149300*2/100= 2986 (april and may for late payment)

Rs 2986/-

which answer is right

Karthik (C A Student) (219 Points)
Replied 26 May 2009

Why have you calculated interest for april and may ? it should be onl for one month

aniket (Accountant) (561 Points)
Replied 26 May 2009

if Tds has been paid late then interest will be applicable

from the date of deduction of TDS/date on which Tds is Deductible
To date of actual payment of TDS.
01.04.2009 to 01.05.09-One month.
02.05.2009 to 08.06.09-part of month =one month

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RAMANJU (here to updating the knowledge) (485 Points)
Replied 26 May 2009

Let me come back to your query, now as per the amendment of section 201 of the IT Act (Finance Act, 2007), the Interest rate is read as follows. " Twelve per cent Per annum" on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid. Going by the new amended provision, the interest liability can be explained as follows: you take the date on which tax deductible i.e payment date or crediting the party date Which ever is earlier, to the date on which tax is actually paid. That means "X" days you will arrive. Now the interest liability will be: TDS amount * 12% * "X" days/ 365. I am interpreting the law in the view of new amendement ( Finance Act 2007) as " Twelve Per Cent Per Annum" in the place of 1% pm or part month.