Thursday, April 8, 2010

LATE DEPOSIT TDS -PAY INTEREST 1.5 % PM


on Thursday, April 8, 2010

The Finance Bill proposes to create a separate class of default in respect of tax deducted but not paid to levy interest at a higher rate of 1.5 per cent per month, i.e. 18 per cent p.a. as against 1 per cent p.m., i.e. 12 per cent p.a., applicable in case the tax is deducted late after the due date. The rationale behind this amendment is that the tax once deducted belongs to the government and the person withholding the same needs to be penalized by charging higher rate of interest.

Non -deposit/late deposit of TDS .Interest and Penalty and other consequences 

It may further be noted that the benefit of the proposed amendment under the Section 40a(ia) of making the payment before the due date of filing the return shall be available only in those cases where tax has been deducted during the previous year but paid after the end of the previous year and before the due date of filing the return. Accordingly, all such persons in terms of the Section 201(1A) need to pay a higher rate of interest, i.e. 18 per cent, from the date of deduction of tax till the date it is actually paid before furnishing the statement under the Section 200(3) of the Act.In case any person claims that tax has been deducted after the end of the previous year and hence a higher interest rate of 18 per cent is not applicable, such a person will not be eligible for the benefit of the proposed amendment to the Section 40a(ia), as this benefit is available only when the tax has been deducted during the previous year itself.

So pay your TDS deduction on time ,otherwise you have to bear heavy interest cost.
Read complete detail about 

Non -deposit/late deposit of TDS .Interest and Penalty and other consequences 

Summary of New provision 

Interest up to 30.06.2010
  • For late deduction of Tax deduction at source-(rate 1 % per month or part thereof) 
  • For late deposit of TDS after deduction (rate 1 % per month or part thereof) 
Interest from 01.07.2010
  • For late deduction of Tax deduction at source-(period date from tax deductible to date of actual deduction )(rate 1 % per month or part thereof) 
  • For late deposit of TDS after deduction (period :date from tax deducted and date of actual deposit)(rate 1.5 % per month or part thereof)
    Separate Rounding of month for both clause ? :From plain reading every one under stand that only rate is increased by 0.5 % per month but one point you should not that now two default period has been bifurcated in two sets and each period has been upper rounded off to a month.Means even a default of one day means loss of interest for one month .

    This amendment is proposed to take effect from 1st July, 2010.
    Related clause reproduced hereunder
    42. In section 201 of the Income-tax Act, for sub-section (1A), the following sub-section shall be substituted with effect from the 1st day of July, 2010, namely:—
    “(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,—
    (iat 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.”.

    Non -deposit/late deposit of TDS .Interest and Penalty and other consequences  

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    1. TDS deducted during the March 2012 last date was 30th April 2012. but we fail to depsoit the TDS on due date now we want to deposit the same by 10th May 2012, what Interest rate is applicable for the TDS deducted during 1st march to 10Th March and from 11th march to 31st march. Could you please confirm or if possible please revert on mail also sharwan.parashar@abhijeet.in

      ReplyDelete
      Replies
      1. Dear SKP

        Interest Rate is 1.5 % per month or part thereof from date of deduction to date of deposit.

        if you deposit tds by by 10th of May then interest will be

        1st march to 10Th March =4.5 %(Same interest will be charged up to 30th April)
        11th march to 31st march.= 3 %

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      2. What is this date 10th March? How it is 4.5% from 1st March to 10th March i.e. only for 10 days? Pl clarify, is there any typo error?

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      3. Date of deposit is considered 10th May ,1st march to 10Th March period is for date of deduction

        means if tax is deducted in between 1st march to 10Th March and deposited by 10 May then interest to be charged 4.5 %

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    2. Dear Rajan,
      In our case the total TDS (including 3% edu cess) is Rs 7349, and it was deducted on 31st March. We wish to deposit it tomorrow. I understand from above discussion that the rate of interest will 3% (1.5% X 2). But I am not very clear how this 3% is to be calculated. Is 3% calculated on Rs 7300 (rounding to nearest 100 and ignoring fraction of hundred; 3% of 7300 = 219) or on Rs 7349 (3% of 7349 = 220.47 rounded to 220). Please advise.
      Regards, Atul

      ReplyDelete
      Replies
      1. Fraction is to be ignored so as per rule 219 is correct .

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      2. Thank you Ranjan PLZ. give give me the rule reference detail.

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    3. if tds is deducted and paid after the due date with out interest then waht we have to do

      ReplyDelete
      Replies
      1. You can pay interest separately or wait for department notice and pay interest thereafter.

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    4. This comment has been removed by a blog administrator.

      ReplyDelete
    5. plz help

      We had deducted TDS on 23.05.12 and still not paid we would like to pay it by 06.07.12, so had will be the rate of interest and amount thereof.

      ReplyDelete
      Replies
      1. RATE of interest is 1.5 per month and part thereof . Period shall be counted from date of deduction to date of payment. So you have to pay 3 % (for 2 month @ 1.5 per month).If you pay before 23.07.2012 the same interest will be charged

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      2. Dear Sir
        we had TDS deducted on 31.03.12 last date was 30th April 2012. but we fail to depsoit the TDS on due date now we want to deposit the same by 11th May 2012, what Interest rate & month is applicable for the TDS deducted during the period. so Could you please confirm or if possible please revert on mail also sk.sinha@cdequi.com



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      3. Interest is payable @ 1.5 % for two months.

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    6. What is the rate of interest for Late Payment Interest till Date of Deposit of Tax?

      Ans : ..................

      What is the rate of interest for Late Payment Interest from Date of Deposit of Tax till Date of Processing?

      Ans : ..................

      Please do respond. Thanks.

      ReplyDelete
    7. What is the rate of interest for Late Payment Interest till Date of Deposit of Tax?

      Ans :1.5% per month or part there of (period from date of deduction up to date of deposit)

      What is the rate of interest for Late Payment Interest from Date of Deposit of Tax till Date of Processing?

      Ans :Not understood .However if interest is paid with date of deposit then no interest due.

      Please do respond. Thanks.

      ReplyDelete
    8. 1.5%PM late payment interest till date of deposit of tax
      1%PM late payment interest from date of deposit to date of processing

      ReplyDelete
    9. I have Filled e-return and I came to know that my employer deposited the TDS on 27/04/2012 and so a interest as a Tax need to be payed.I have already uploaded the ITR1 XML Now:

      Which Challan# need to be used to pay interest and in what category

      Should I file a new return after paying the interest or I send the Acknowledgment to bangalore office along with the interest payment receipt

      ReplyDelete
      Replies
      1. if your employer has paid tds late then he has to deposit interest on late payment not you.Further tds deducted in the month of march can be deposited by 30th April.

        So need to worry , employer is responsible for interest ,if any

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      2. so shall i wait for the notice ,as the acknowledgement i got after filling the e-return says Tax payable as interest Rs 412 or I should send this acknowledgement

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      3. The Interest shown in the return is not due to late deposit of the return . So it should be paid by you and revised return should be filled after revision of the return . Send both ITR V forms

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    10. I had deducted the tds on 13.03.2012 but I am failed to paid on due date. I have to pay tds + interest on 07.09.2012. Then how much interest should have to be pay kindly bifurcate. In % and months also means what % is applicable and how many months interest I have to pay.
      TDS amount is = 1522
      Kindly do the needful at the earliest.
      Swapnil
      9881735014

      ReplyDelete
      Replies
      1. 13.03.2012 to 07.09.2012= 6 month @ 1.5 % per month on 1500 Rs =90Rs Interest.or you can pay 9% of 1522/- on safer side.

        if you are paying now (21.9.2012) then pay 10.5 % of 1522

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    11. sir
      i have paid the TDS on 18/9/2012 insted of 5/9/2012 and i also paid the late payment charges
      my question is late payment charges under any section like 11C or N11c if yes what it means
      could you please conferm it

      ReplyDelete
      Replies
      1. 11C is not an income tax section ,so nothing to worry about 11C

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    12. Dear Sir,
      If employer has not deposited TDS amount deducted from salary and the employee has filed his return late. Should the employee be liable to pay interest on late filing of return.
      Please reply, it is urgent.

      ReplyDelete
    13. Sir
      we have to deduct tds on audit fee on provision of audit fee as on 30.6.2012, but we didn't do, now we want to deduct the tds and pay before 30th Nov 12, what will be the rate of interest and number of months to be provided
      bhaskar

      ReplyDelete
    14. sir
      we have to deduct tds on provision of audit fee booked on 30.6.2012, but tds not deducted on this. now we want to deduct tds on this , what will be the rate of interest and period of deduction if we pay it on 30.11.2012, clarify

      ReplyDelete
      Replies
      1. HOW TO FILL LATE PENALTY ON TDS IN CHALLAN NO. 281

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      2. for 5 months@1.5 % pm on audit fees

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    15. Sir if commission not due in previous year and paid in current year. TDS will be deducted or not and what interest are paid of these amount.

      ReplyDelete
      Replies
      1. tds is required to be deducted on due or paid which ever is earlier basis .as in previous year amount is not due so on payment tds is required to be deducted .,

        further regarding interest query is not clear .

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    16. I have deducted TDS on 31.12.2012 but not paid yet. I want to know, how many days I can get to paid the TDS after deduct

      ReplyDelete
      Replies
      1. tds is to be deposited by 7th of next month ,in present case it was payable by 7th January ,as you have not deposited it timely ,you have to pay it with interest @ 1.5.

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    17. I have deducted the TDS for different transactions on different dates in the month of January, 2013. Actually I have to deposit the entire TDS deducted amount on 07/02/2013. But I have deposited the amount the amount to Govt. Account on 08/02/2013. Please clarify that, for how may months I have to Pay Interest on late payment In this transaction. I am thinking that, I have to pay Interest @1.5% for per month considering the grace period. Is it correct or not.

      ReplyDelete
      Replies
      1. You have to pay 1.5 % on entries which has been deducted on or after 09/01/2013 and 3% (2 months) for tds deducted on or before 08/01/2013.

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    18. please tell me the calculation of late payment interest from date of deposit of tax till date of processing

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    19. dear sir,
      plz tell me that, i have deducted tds on salry for the month of jan-2013 . but not paid on bank 7thfeb -2013,,,,,,, can u suggest me that interest will be applicable yes / no

      ReplyDelete
      Replies
      1. On which date payment has been made for january salary .if it is in january it self , then yes you have to pay interest @1.5%.if salary is paid in feb 2012 then no need t worry ,you can pay tax before march ,07

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    20. dear sir

      ple tell me for late payment for TDS how much percentage for per month. for example i want to pay january 2013 tds amount but unstill not paid. so how much percentage ?

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    21. Dear All,

      I Deducted the TDS on 01/01/2013 the Due date for Payment of TDS is 07th Feb 201, What is the total percentage of Interest i.e 1.5% or 3%,

      please clarify

      ReplyDelete
    22. U/s 195G we had paid the Interest payable to Stanchart Bank,UK on 01/03/2013.
      We paid the Witholding TAX on 29/03/2013. And we were told we need not pay any Delayed Payment Interest on the WHT. What is the correct position and the Rate of Interest on delay,if any.

      ReplyDelete
    23. RAJA BABU

      Please if you don't mind tell us also the Penal Interest Rate PM if there is delay in payment of SERVICE TAX?
      Thanks

      ReplyDelete
      Replies
      1. check details here

        http://www.simpletaxindia.net/2011/03/interest-rate-increased-for-late.html

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    24. I have made a late payment of TDS without calculating interest on it. Kindly advise me whether i am liable to calculate interest upto the date of TDS paid to government or upto the date on which i am making the payment of interest??

      ReplyDelete
    25. I have received Intimation to pay on Late payment of TDS.

      Now when i try to make the payment online.. it is mandatory to select Nature of Payment.
      So what Should i select in that?

      And in Type of Payment i have to select Code 400. Right?

      And in another Quarter for Penalty payment, So what to select in Nature of Payment.

      Please Guide me. Thank You.

      ReplyDelete
    26. sir i deucted tds in the month of march 2013 but deposited in the month of 6th may 2013 with 1 month of interest now this entry in which year i shown in the year 12-13 of 13-14 & how to file return if i shown this entry in the year 12-13 so how can i file return q4 12-13

      ReplyDelete
      Replies
      1. Entry date is decided on the basis of deduction of tax basis ,so you have to show entry in fy 12-13

        further interest payable is depended on date of deduction of tax and it will be more than or equal to more than 2 month in case of march tds deposited in may

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    27. Dear sir

      I paid 4 lacs to the builder on 01.01.14. I am late to deposit the Tds kindly let me know what would be the interest and fee .Kindly tell me the percentage fixed by the government on late payments.

      I am very thankful to you for your kind advice.

      Thank you

      ReplyDelete
      Replies
      1. You have to pay 1.5 % interest per month for delay .Part of the month is taken as full month

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