for Four Months....March, April May June.

Dear Sir,

Please provide TDS interest calculatior excel 

But why interest for two months when total delay is less than a month ?

e.g. amount paid on 30th june , tds deducted on 30th june , due date 7th july , thds paid to govt. credit on 27th july.

now delay period - is 30th june to 27th july i.e. 28days ? so only one part month.

but deptt. is levying 2month interest in such cases too. Quite unacceptable.

Pls share your views.

dear user,

it is already more than 2 years when tds for part of month is taken as full month. It is no use to argue with relevant sections etc....I am really astonished to know such problems still facing by the user and fighting for the definition of 'part of month' . It would be better to deposit the difference and close the matter.

we deduct Tds on 31st Aug 2014 of Rs.91017/- & we make payment on 7th Sep 2014. please help for interest.

How Much of Interest amount.

I agree with CA Parabhat Chopra & S R Rajan. As per my view as well, Department is not right by charging 2 months interest for delay of 28 days as in example given by CA Prabhat. Initially I used to calculate interest as per number of days but post getting demand from department I started calculating interest as per justification report to avoid undue undue non compliance.

I am planning to discuss the issue in recent TDS seminar on 19th November in order to get an overview of all professionals present duirng seminar. Hope to have a consensus on issue...

The interest is to be calculated as per illustrations below: 

Case 1:

Tax Deducted on 26th June, TDS deposited on 9th July (due date was 7th July)

The period of 26th June to 30th June will be calculated as one month (being part of a month) & from 1st July to 9th July will also be treated as one month. As such in this case, the interest payable is for two months. Total interest would be 3%. Sounds odd, but it is true –  for a delay of 2 days, one has to pay interest for two months. 

Case 2:

Tax Deducted on 20th March, TDS deposited on 5th May  (due date was 30th April)

The period of 20th March to 31st March will be calculated as one month, 1st April to 30th April will be another month & from 1st May to 5th May will be treated as another one month. As such in this case, the interest payable is for three months. Total interest would be 4.5%. For a 5 day delay, the interest payable is for 3 months. 

Logic behind this calculation is that, if dues are not paid on time, the interest for each month (or part thereof) is to be paid right from the date of deduction till date of deposit of the TDS. Each month is treated based on the Calendar Month instead of counting the number of days.