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Regarding TDS default months if late paid

Prashant Balkrishna Thanekar (Accounts Manager) (181 Points)

23 October 2019

Respected all,

If salary for the month of April 19 on which TDS is paid on 11/05/19 which have to paid on 07-05-19 Then how many months to be taken for Interest calculation. I am confused whether 1 or 2 months

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Bharat Bohra (306 Points)
Replied 23 October 2019

Under Section 201(1A) for late deposit of TDS after deduction, interest payment should be at a rate of 1.5% per month.

The calculation of interest is on a monthly basis and not on the number of days i.e. part of a month is considered as a full month.

The payment of the interest amount should be from the date at which TDS was deducted, from the date of which TDS was due.

For example, The due date of TDS payment is 7th May for a TDS deduction on 19th April. If the TDS payment is later than 7th May, then interest calculation starts from 19th April and not 7th May.

Here, for calculating TDS interest, we should consider the calendar month. Therefore if you delay the payment by one day, you have to pay interest for two months.