Interest for late payment

[Guest]

The salary for our Institute for the month of March and April was paid in the month of May 17. The Income tax collected from the salary was deposited on 5th June. The income tax Department imposed interest for late payment under section 200A.

In the IInd case incometax is deducted short but the payment was deposited in time. The income tax Department imposed interest for late submission and demanded the amount which was less deducted under section 201A and 206.

Kindly inform what is section 200A and 206 and are they applicable in the above cases. Please also intimate how the interest is calculated.

[DR.MARIAPPAN GOVINDARAJAN]

In my view they are applicable in the above cases.

AI Summary

Interest for late payment can be imposed where TDS is deposited late or deducted short, per tax provisions. Tax was deducted from salary paid late and the tax deposited subsequently; the tax department imposed interest and demanded amounts for late payment and short deduction under the cited statutory interest provisions. The core issue is the applicability of those interest provisions to late deposit and short deduction and the method for calculating the interest; the sole reply states the provisions are applicable without explaining the computation or allocation of interest liability.