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Interest on late deposit of TDS – 3 % for delay of one day

Interest on late deposit of TDS is applicable @ 1.5 % per month or part thereof. The period for delay is taken from date of deduction to date of deposit. So, in specific cases a delay of one day may lead to pay interest @ 3 % . 

Suppose:

  • TDS deducted on 01.08.13. 
  • In this case, due date will be 07.09.13. 
  • If we deposit tax on 08.09.13, one day delay. 
  • Interest will be applicable for 2 months – From 01.08.13 (date of deduction) to 08.09.13 (date of deposit) for two months @1.5 % p.m=3% 
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  • Harinder Salwan says:

    We have taken up this issue with the department since there is a flaw in the software while computing.
    Even when the date of deduction is 1/8/2013 and payment is due on 7/9/2013 without any interest then if we make the payment a day late it has to be charged for 1 month and not two months as has been happening and demands are being raised by the department since last two years now and what surprises me is that no one has thought it fit to take up the issue with the government and all professional CA are advising their clients to pay up and the government is getting additional revenue all because of a small design flaw in the software.

    I hope that there is a response from all bodies to take it up and solve this double work and the government wakes up and corrects the design flaw in the software.

    August 26, 2013 at 11:50 am
    • TDSMAN says:

      Dear Sir,

      The issue is rightly pointed out by you and needs clarification from the government.

      August 27, 2013 at 8:36 am
    • SHIVANG VAIDYA says:

      Dear Professional,

      Will the situation be same if the date of deduction is 26-08-2013?

      and actual deposit date is 08-09-2013.

      This is actual situation, for which I am charged interest of 2 months @ 1.5% per month in justification report.

      As per my calculation, 1 month interest is justifiable.

      Please guide.

      November 13, 2013 at 1:41 pm
      • TDSMAN says:

        Dear Sir,

        Yes, you will be charged for 2 months as per department’s calculation.

        December 27, 2013 at 2:18 pm
      • karan verma says:

        1% in my opinion also

        April 18, 2014 at 6:10 pm
      • karan verma says:

        1.5% in my opinion also (1 month)

        April 18, 2014 at 6:11 pm
  • CA D N CHOUDHARY says:

    suppose we have taken a example that the date of deduction is 30 April 2013, then the due date is 7 may 2013, if we are deposit the TDS on 8 may 2013. then interest on TDS should be for 1 months.
    but, IT Department has calculated Interest on the basis of 2 month (30 April to 8 May 2013). this is big hardship for Tax deductor.

    December 4, 2013 at 1:01 pm
  • CA. SUBHASH CHANDRA AGRAWAL says:

    The issue is rightly pointed out and i am also facing the same problem my clients are asking – delay is for 1 day from due date ? 3% charged
    is the statute permit to collect excess interest. the departments is overriding the law by ignoring the due date for payment.

    if we apply the common sense delay counted after due date.

    i also inquired the same from concerned department there view is also the same but also saying they have nothing to do mistake is in software if you are suffering you may appeal. is it possible to appeal for lower amount like 500/- 1000/- etc or cost effective for clients/professionals

    December 4, 2013 at 1:42 pm
  • Vikram Publishers Pvt Ltd. says:

    I got a demand for late payment of TDS for three days i.e. due date on 07-09-2013 but I paid on 10-09-2013.

    the TRACES served me a demand of Rs.5670/- as default for late payment of TDS on the challan amount of Rs.63080/-. I can’t find the formula they adopted for calculating this. Please assist me.

    December 26, 2013 at 11:34 am
  • Avani Joshi says:

    Can anyone please provide case laws where interest on late payment of TDS is to be calculated from date of deduction till date of payment or other way?

    December 31, 2013 at 11:36 am
  • Kumar Krithivasan says:

    The same problem for the company where I’m working. We’ve been served for huge demand in respect of FY 11-12 and 12-13 due to the unfriendly provisions in the Act. Professional bodies like ICAI should take up the issue with CBDT and the CG to solve the issue and rectify the lacunae in the provisions when the discussions are held by the Finance department with interested parties as a pre-budget exercise each year.

    January 11, 2014 at 4:58 pm
  • Kumar Krithivasan says:

    the same problem for the company where I’m working. We’ve been served for huge demand in respect of FY 11-12 and 12-13 due to the provisions in the Act. Professional bodies like ICAI should take up the issue with CBDT and the CG to solve the issue.

    January 11, 2014 at 5:04 pm
  • Kumar Krithivasan says:

    the same problem for the company where I’m working. We’ve been served with a demand in respect of FY 11-12 and 12-13. however under service tax the interest is charged from the first date after the due date till the date of actual payment on number of days basis. Will there be difference between direct taxes and indirect taxes provisions when the same is emanating from finance ministry of the CG? Can anybody explain the reasons for the same?

    January 13, 2014 at 11:46 am
  • Kumar Krithivasan says:

    i’m unable to understand what ids expected of me on moderation in the comments?

    Can anybody explain to change my style of comment suitably?

    January 13, 2014 at 11:48 am
  • ASHISH JAIN says:

    suppose we have taken a example that the date of deduction is 31 MARCH 2013, then the due date is 30 APR 2013, if we are deposit the TDS on 7 may 2013. then interest on TDS should be for 2 months.
    but, IT Department has calculated Interest on the basis of 3 months (30 MARCH to 7TH MAY 2013). this is big hardship for Tax deductor.

    THERE SHOULD BE SOME DECISION ON THIS

    EVEN FOR DUE DATES OF RETURNS THE DATE SHOULD BE EXTENDED TO 25TH OF EACH QUARTER

    TO GIVE THOROUGH CHECK UP THIS REQUIRES SOME TIME

    January 17, 2014 at 9:58 am
  • NILADRI SEKHAR RAY says:

    Dear All,

    Nov’2012 we download a Justification report for our TDS return default. A interest value of Rs 2817/- showing on that default statement. We checked that default statement and submit a correction statement with addition of Rs. 2800/- interest challan. But we recently received a Intimation U/S 200A from TRACES with a default amount of Rs. 1050/- (after adjusting previous Rs. 2800/-; i.e. (3850-2800=1050)).

    Please said that why this due default generated ?

    January 28, 2014 at 12:52 pm
  • CA Giriraj Maheshwari says:

    The department must send the calculation of interest and penalty amount with the demand letters so that amount can be calculated by us also, whether it is correct or not. However department is not justifible to create demands of interest for 2 months. Take up our case where we deducted TDS from salary payment on 30-4-2013 and deposited on 8-5-2013 and department raised interest demand for 2 months @ 1.50% PM on Rs. 105000-00 (TDS amount).

    February 3, 2014 at 1:08 pm
  • Gopal kumar says:

    the same problem faced by me. We’ve been served for huge demand in respect of FY 11-12 and 12-13 due to the provisions in the Act. I think we should make a forum comprising complain maker like me & arrange to fight by making dharna pradarshan to open eyes of CG and Tax officials. It may be effective specially in current General Election 2014 environment. We just can’t sit idle expecting Professional bodies like ICAI to take up the issue with CBDT and the CG to solve the issue.IT IS TIME TO STAND FOR INJUSTICE

    March 13, 2014 at 2:36 pm
  • Omkar says:

    which date will be considered as date of deduction :

    1) Date of Booking Salary in to Accounts ?

    or

    2) Actual Date of payment of Salary to Employee ?

    April 19, 2014 at 5:08 pm
  • Yogesh Bhardwaj says:

    what are the consequenses if the TDS is paid after due date without interest?

    April 25, 2014 at 11:18 am
  • Yogesh Bhardwaj says:

    What are the consequenses if TDS is paid after due date without interest?

    April 25, 2014 at 11:19 am
  • SANJAY says:

    I RECEIVED BILL OF Rs. 98250/- BILL DATED 31/03/2014 ON PROFESSIONAL FEES AND WANT TO TDS DEPOSIT 2ND MAY 2014. THAN INTEREST RATE 1.5% OR 3% CHARGED ME

    May 1, 2014 at 8:04 am
    • dinesh says:

      you have crossed your due date by 2 days so,( 98250*1.5%*2 = 2947.5 )
      one day is considered one month

      May 9, 2014 at 4:43 pm
    • SANGEETA DHAWAN says:

      I RECEIVED BILL OF Rs. 98250/- BILL DATED 31/03/2014 ON PROFESSIONAL FEES AND WANT TO TDS DEPOSIT 2ND MAY 2014. THAN INTEREST RATE 1.5% OR 3% CHARGED ME

      May 25, 2014 at 3:29 pm
  • Arpit says:

    if TDS Deducted on 31st March of which Due date is 30th April.if payment made on 1st of May than how many months interest have to pay..??

    May 1, 2014 at 1:52 pm
    • ansari says:

      if TDS Deducted on 31st March of which Due date is 30th April.if payment made on 1st of May than how many months interest have to pay 2 then 3…..?

      May 12, 2014 at 11:42 am
  • Dev says:

    3 Months i.e March, Apr & May
    Refer Sec 201(1A) of Income Tax Act. It clearly states that in case of delay in remittance of TDS , interest has to be paid from the date of deduction to the date of remittance at the rate of 1.5% per month or part of the month

    June 4, 2014 at 4:53 pm
  • Sai Krishna says:

    Hi !
    I have paid Rs.1.5 Lakh to builder in 4-Oct-2013 and forgot to deduct the TDS for my flat. If I pay the TDS today i.e on 5-July-2013, how much amount should I pay?.

    Per my understanding the amount should be 1.5 x 10 months delay=15% of the tax amount due Rs.1545 (which is 1.03% of Rs.150000), hence 15% of Rs.1545 will be Rs. 232. Total tax to be paid will be Rs.1777.

    Can anyone comment/correct if this calculation is correct or wrong?.
    Thanks
    Kris

    July 5, 2014 at 1:19 am
  • Roni Das says:

    Hi,
    I wanted to know one thing that, late filing of TDS per day Rs.200/- is mandatory for payment???

    July 10, 2014 at 7:13 pm
  • pushkar says:

    i want to ask that if salary is around 50000 per month so the provision says you should deduct tds monthly as total salary for the year will become 600000 but tds is deducted late in the month of feb does the provision of late deduction of tds become applicable here i.e, in the case of salary.

    July 10, 2014 at 7:38 pm
  • sham k says:

    Rs.30000 per month t.d.s has been deducted and still not paid for which iam not able to file my returns !
    Where do i complain about this and how much do you think the penalty would be ??

    July 30, 2014 at 6:55 pm
  • Mukesh says:

    if I file TDS return late then 200 per day I need to submit on tin center or somewhere else??
    Please suggest.

    October 10, 2014 at 1:58 pm
  • pranav7 says:

    What happens when if deduction was to on 18 April but actually deducted on 18 July and then payment instead of 7 Aug made on 20 Aug.
    Interest in my understanding as per department will be

    Non deduction – 4 month (April, May, June, July)
    Non Payment – 2 Month (July, Aug)

    November 4, 2014 at 12:31 pm

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