TDS Interest and Penalty Calculation

Tax Practical
Practical TDS (Non Salary)

We know that Due date for TDS is 7th of next month

However for March,TDS Due date is 30 April

If deposited late,we have to pay interest @ 1.5%

If  TDS is deposited late

Interest is payable from

Date of Deduction (and not Last Date of Challan)

to

Actual Date of Deposit

@ 1.5%

Changes in Interest Rate due to lockdown, If TDS Late Deposit

However,Due to Lockdown,Government has temporarily reduced Rate by 50%

 Current Rate New Rate (Temporary) Interest Rate on Late Deposit of TDS 1.50% 1.5%*50%=0.75%

Due between 20 Mar 2020 to 29 June 2020,

if paid by 30 June 2020

#### Example 1

Bill of 20 October received of 50000 of Maintenance Charges

Payment made on 24 Oct of 49000(50000-2% tds)

What is Date of Deduction?

What is date of Deposit?

Suppose TDS Actually deposited on 8 November

What is Interest to be paid?

Note

If TDS of March late deposited,then 3 Months Interest Payable

1.5%*3=4.5%

#### Example 2

Bill of 29 March received of 50000 of Maintenance Charges

Payment made on 30 March of 49000(50000-2% Tds)

What is Date of Deduction?

What is date of Deposit?

Suppose TDS Actually deposited on 1 May

What is Interest to be paid?

Made by

#### CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.