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interest for late payment of TDS

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interest for late payment of TDS

Postby dipcacs » Thu Jul 22, 2010 2:44 pm

Respected all

TDS due to be deposited on 07-02-2008 was banked on 08-02-2008. Now, interest for late payment of TDS has to be calculated @1% for 1 month or for 30 months (till date) assuming it is paid within
31-07-2010 ? Kindly enrich.My confusion is whether interest will be charged for only 1 month ie february 2008 or it will be till july 2010, if it is paid in july 2010 ? as the principle amount was paid, can there be interest on interest ?



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Re: interest for late payment of TDS

Postby srinivasaraghavan » Wed Sep 08, 2010 10:07 am

I think the query suffers a confusion in dates namely,
TDS due to be deposited on 07-02-2008 was banked on 08-02-2008. If it is banked on 8th February, what is the relevance of 31-07-2010?
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Re: interest for late payment of TDS

Postby dipcacs » Wed Sep 08, 2010 11:05 am

The relevance of 31-07-2010 is/was the date / likely date of payment of interest u/s 201(1A) for the 1 day delay in deposit of TDS in 02/2008. Where is/was the confusion sir ?

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Re: interest for late payment of TDS

Postby srinivasaraghavan » Wed Sep 08, 2010 4:16 pm

As regards calculation of interest, even for one day delay, interest shall be levied @ 1% per one month.
The interest so calculated shall be paid before the quarterly statement for the relevant quarter. The confusion arose because in the case mentioned in the query, the relevant quarter is 31st March 2008 and the due date for the statement 15th June 2008, within what time the interest must have been paid. If that is the case, how does 31st July 2010 come into the picture? Does that mean the interest was not paid till then?
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Re: interest for late payment of TDS

Postby dipcacs » Wed Sep 08, 2010 5:51 pm

yes, sir. interest was unpaid till 31-07-2010 when i posted the query after getting notice from the TDS ward

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Re: interest for late payment of TDS

Postby srinivasaraghavan » Wed Sep 08, 2010 7:44 pm

The interst amount does not suffer interest on interest, but will be subject to recovery proceedings under the Act.
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