How to calculate interest on tds late payment?

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3 answer(s)
Answer # 1 #

Example: TDS ₹10,000 due on 7th July, deposited on 7th October. Months delayed = 3. Interest = 10,000 × 1% × 3 = ₹300 (if deducted on time).

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Answer # 2 #

Interest on late TDS payment is calculated as per Section 201(1A) of Income Tax Act: - 1% per month for tax deducted but not deposited. - 1.5% per month for tax not deducted. Interest is calculated from the due date to actual payment date.

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Answer # 3 #

Tip: Interest is compounded monthly and separate from penalty under section 221 or late filing fees. Always pay on time to avoid extra charges.

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