How is interest calculated when TDS is deposited late?

Because TDS interest and penalty rules differ by jurisdiction and by specific circumstances, I can’t confirm which numeric rate applies in your case. Below are general, practical steps you can follow to understand and compute interest on late TDS deposits, and reasons you might see different rates cited (for example, someone quoting 1.5% versus 1%).

1) Identify the applicable provision and rate

• Locate the law, regulation or official guidance that governs TDS deposits in your jurisdiction. Interest and penalty rules are set out in statute, regulation, or official circulars.
• Check whether different rates apply to different situations (for example: late deposit vs late filing, different periods, or different categories of payee/withholding).

2) Clarify the relevant dates

• Determine the date on which tax was deducted/withheld (if relevant).
• Determine the due date for depositing that TDS and the actual deposit date.
• Compute the period of delay (usually counted in days or months from the due date to the actual deposit date).

3) Confirm how the rate is applied

• Find out whether the stated rate is an annual (per annum) rate and whether interest is calculated on a simple or compound basis.
• Confirm whether the rate applies proportionally to the fraction of a year (e.g., daily or monthly pro‑rata) or is applied by a prescribed formula in the law/guidance.

4) Basic calculation approach (conceptual)

• Interest amount = principal (the TDS amount not deposited) × applicable rate × time period (expressed in the same units the rate uses).
• For example, if the applicable rate is an annual simple rate, convert the delay into years (or use the prescribed daily/monthly factor) before multiplying.
• Check whether rounding rules or minimums/maximums apply under the rules.

5) Why you might see different rates (e.g., 1.5% vs 1%)

• Different provisions: one figure could be an interest rate, another a penalty rate, or they may apply to different types of defaults.
• Different periods: a rate may have changed over time, or a temporary surcharge may have applied for a specific period.
• Different calculation bases: one rate might be expressed per month and another per annum, or one might be compounded and the other simple.
• Misinterpretation or rounding: secondary sources may have misquoted or simplified the official rule.

6) Practical next steps

• Check the official website or circulars of your tax authority for the precise provision and worked examples.
• If you have the specific provision name/number or a link, review the exact formula and any examples given.
• If you want a calculation reviewed: provide jurisdiction, the TDS amount, due date, actual deposit date, and any reference to the provision or notice that mentions the rates.
• Consider engaging a qualified tax advisor if the amounts or compliance risk are material.

If you share the jurisdiction and the exact reference (or the relevant dates and amounts), I can outline the steps to compute the interest for that scenario. For a definitive, binding answer and to ensure compliance, please consult your local tax authority or a licensed tax professional.