ANKSS (CA) (151 Points)
16 November 2010if tds for the month of sept is deposited say on 9th of october, then interest @ 1.5% will be levied fron the date on which tax is deducted till the date it is deposited(provision).
It means int will be levied for 2 months i.e. sept & oct as tax is deducted in sept. is it right?????
However logically int shud b only for the month of oct.......
I wnt further clarification
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 16 November 2010
Interest Only For Month of October.and if U Paid it Before or on 7th October Then No Interest is Leviable.(also depend on nature of payment.)
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 16 November 2010
Interest will be leviable on monthly basis. If TDS was deducted on say 10th September and paid on 09th October then one months interest i. e. 1.5% interest only payable. However if TDS deducted on 05th September and paid on 09th October then two months interest payable i. e. 3% interest payable.
A.Deepa
(CA )
(195 Points)
Replied 17 November 2010
I agree with Aditya Maheswari, since for interest calculation a part of the month will also be considered as 1 month period. So if it is deducted on 10th September and paid on 9th October, the default is exactly 1 month from the date in which TDS is deducted. If it is deducted before 10th September, even a 2 days extra will be considered as 1 month and 1.5% interest for the extra month has to be borne.
Relevant provisions of Interest Section 201:
“(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.”.
Your case fall under Section 201 (1A)(ii)- Tax deducted but not remitted
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