Int. on late deposite TDS

[udit gupta]

What is the Interest calculation of late deposit of TDS. Example : If We deduct amount on 26 August 2010 and deposite on 6th October 2010. Regards Narendra

[CAGOPALJI AGRAWAL]

Interst under Section 201(1A) is 1% and is payable from the date on which such tax was deductible to the date on which such tax is actually paid.

This provision is amended w.e.f. 01/07/2010 as under:

1% from the date on which such tax was deductible to the date on which such tax is actually deducted.

1.5% from the date on which such tax was actually deducted to the date on which such tax is actually paid.

AI Summary

Interest on late TDS deposit: amendment imposes split-rate interest from deductible date, through deduction to payment. Interest on late deposit of TDS is now calculated in two accrual periods: a first interest rate applies from the date the tax was deductible until the date it was actually deducted; a second, higher interest rate applies from the date of actual deduction until the date of actual payment. This replaces the single-rate interest previously charged from deductible date to payment date and clarifies separate compliance periods for deduction and deposit.