As per Budget 2010, following amendment has been proposed in section 201(1A) of the Income-tax Act,
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 tax
from 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.”.
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