TDS Interest Calculator - Late Deduction, Payment, & Filing
Why it is Important to Pay Interest When there is delay in Paying TDS Amount?
There will be delay in paying TDS for various reasons. If the deductor deposits TDS after the due date without interest, when the return is processed, deductor may receive a demand notice from TRACES with Interest and penalty if any. So, it is required to pay interest also while making TDS Payments in case if there is delay in TDS Payment.
In case you have not deposited TDS by the correct date, the following penalties are applicable:
Late filing fee (if you do not file by the deadline)
Interest (if you do not deposit the TDS amount in time)
Penalty (if TDS is not filed within one year of the due date)
There are 3 types Late Fee Payment of TDS
Interest on Late Deduction of TDS.
Interest on Late Payment of TDS.
Interest on Late Filing of TDS.
Finance minister Smt. Nirmala Sitharaman announced a slew of measures for extension of statutory and regulatory compliances in view of the coronavirus pandemic spreading its wings and impacting the economy.
*For delayed deposit of TDS, interest has been reduced to 9 % from 18% for those where the TDS is due from 20.03.2020 to 29.06.2020. This benefit is available only if such TDS is remitted to the credit of government on or before 30.06.2020.
Many Organisations are forced to make delayed TDS Deposit due to situation prevailing in the country and this online free TDS Calculator will compute and give details of calculation for quick reference.
The interest is to be calculated as per the Explanation and Examples below:
Late Deduction of TDS
Under Section 201A, you will have to pay interest of 1% per month or part of the month from the date on which tax-deductible(On the Day of Transaction) to the date on which tax is deducted this applies to “Non-deduction of tax at source, either in whole or in part”.
Late Payment of TDS
Under Section 201(1A), you will have to pay interest of 1.5% per month or part of the month from the date of deduction to the date of payment this applies to “After deduction of tax, non-payment of tax either in whole or in part”.
Tax Deducted on 19th March 2020
TDS deposited on 4th May (due date was 30th April)
19th March – 31st March – 1 Month
1st April to 30th April – 2nd Month
1st May to 4th May – 3rd Month
Each month is treated based on the ‘Calendar Month’ instead of counting the number of days. For calculating delay in a month, each month is treated based on ‘Calendar Month’. So, even though there is a delay of 4 days, the interest payable is for 3 months. The total interest would be 4.5%.
Late Filing of TDS
If the quarterly returns are not filed within the prescribed due dates, a late fee of Rs 200 per day (two hundred) is applicable Under Section 234E, however such TDS amount is restricted to the amount of TDS.
Further as a relief measure of Corona Pandemic, due date for the return of Q4 FY 2019-20 has been extended to 30th June 2020.
Say that your payable TDS amount is Rs 4000 on 23rd June and you pay it on 14th December (i.e. 189 days). Then the calculation comes out to Rs 200 x 174 days = Rs 34800, but since this is greater than Rs 4000, you will have to pay only Rs 4000 as the late filing fee. Added to this, you also have to pay interest.