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Interet on delay payment of TDS

T.N.REDDY (M.Com) (239 Points)

20 March 2023

Sir, when TDS is not paid on or before 7th of the subsequent month, then why the Traces is charging the interest for two months as against one month. kindly advise that is it correct ? or also kindly advise relevant section sir.

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4 Replies

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 20 March 2023

If you pay with interest within one month of deadline then it is required to pay only one month.

Submit online tds correction statement through traces.

Else interest keep adding even payment is done.

Download justification report and check the reasons for demand

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CA Rakesh Ishi (Working at Private Company) (8200 Points)
Replied 20 March 2023

As per Section 201(1A) of the Income Tax Act, if the deductor fails to pay the TDS on or before the due date, then he shall be liable to pay simple interest at the rate of 1.5% per month or part of the month for the period of delay, calculated from the due date of deduction till the date of actual deposit of TDS.

Therefore, interest for TDS delay is calculated on a monthly basis, and the period of delay is counted from the due date of TDS deposit till the actual deposit date. Therefore, if the TDS is not paid on or before the due date, the interest will be charged for every month or part of the month for which the TDS remains unpaid.