Rahul Fageria

Sometimes Deductor deposit TDS after the due date without Interest, hence when return processed, demand notice raised by TRACES and penalize heavy interest on late payment. But some Deductor does not know how to calculate Interest on delay TDS Payment.

The interest is to be calculated as per illustrations below: 

Case 1:

Q-1, Tax Deducted on 25th June, TDS deposited on 10th 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 3 days, one has to pay interest for two months.

Case 2:

Q-4, 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.

Download Download Automatic TDS Delayed Payment Interest Calculator

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6 responses to “Download Automatic TDS Delayed Payment Interest Calculator”

  1. R K Singla says:

    Your chart as per Excel Sheet do not distinguish provision made on the last day of the month. Supposing TDS deucted Rs. 1000/- on 21st Dec.2016 and deposited in 10th Jan. 2017 interest charged would be for 2 months. But when the same TDS is deducted on 31 Dec.2016 and deposited in 10th Jan. 2017 interest charged would be for 1 month but your chart shows 2 months. To my mind end of month delay of 1day will commence from 1 January and not 31 Dec. 2016. There is no default on the same day. There are various high court judgements supporting this . You may give your opinion please.

    • Rahul Fageria says:

      Please refer the illustrations explained above for clarification. Part of month considered as full month.

  2. Senthil says:

    Thank you sir. Nice to use.

  3. Ashis says:

    I took mortgage loan on 24% pa and repaying thru emi Rs.200011/- including principal amount.Am I to deduct TDS on the amount .if yes the quantity.

    • Rahul Fageria says:

      An Individuals or an H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession where accounts are required to be audited u/s 44AB, in the immediately preceding financial year.

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