TDS Interest % for March-20

[kiran kumar]

Dear Sir,

TDS for March-20 was paid on 02.05.2020. As per new rule Interest rate on tds is 0.75% per month. For March-20 we paid in 02.05.2020 now we need to pay 3 months interest 2.25% (Each month 0.75%).

If the above calculation is correct or not Requesting you to advise

Thanks & Regards,

Kiran Kumar

[Ganeshan Kalyani]

Sir, the current rate of TDS has been reduced by 25% from 14.05.2020 to 31.03.2021.

[CASusheel Gupta]

As per section 201

Interest is leviable at 1.5% (reduced rate 0.75%) 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 was actually remitted to the credit of the Government.

You have rightly stated that interest for three months is payable.

CA Susheel Gupta

9811004443, 8510081001

[kiran kumar]

Thanks for your clarification

AI Summary

TDS interest rule: reduced monthly interest accrues from date of deduction until remittance of tax.
Under section 201 interest on TDS runs from the date of deduction to the date of remittance and is computed for every month or part of a month. A temporary reduction in the monthly interest rate applies for a specified period; where TDS for March was remitted on 2 May, interest is payable for the intervening months or parts thereof between deduction and actual remittance.