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?
View answer
Date of Deduction is
Earlier of
Bill -->20 Oct
or
Payment-->24 Oct
i..e 20 Oct
What is date of Deposit?
View answer
Date of Deposit is 7th of Next month of Deduction
i.e. 7 November
Suppose TDS Actually deposited on 8 November
What is Interest to be paid?
View answer
Interest is to be calculated from 20 Oct to 8 November
This will count as 2 months (October and November)
Interest Rate =1.5%
Interest Amount=1000*1.5%*2=Rs 30
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?
View answer
Date of Deduction is
Earlier of
Bill -->29 March
or
Payment --->30 March
i.e 29 March
What is date of Deposit?
View answer
Date of Deposit is 30 April for March TDS Non Salary
Suppose TDS Actually deposited on 1 May
What is Interest to be paid?
View answer
Interest is to be calculated from 29 March to 1 May
This will count as 3 months (March,April and May)
Interest Rate =1.5%
Interest Amount=1000*1.5%*3=Rs 45