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Aicountly Income Tax Desk
Compliance
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Under section 201(1A) of the Income-tax Act, 1961, interest on TDS is charged per month or part of a month, and the two rates cover two different defaults:
- 1% per month — when tax was deductible but not deducted, from the date it was deductible until the date it is actually deducted.
- 1.5% per month — when tax was deducted but not deposited, from the date of deduction until the date it is actually deposited.
A part of a month counts as a full month, so a deposit one day late attracts a full month's interest. Interest must be paid before the TDS statement is filed. A late filing fee under section 234E is separate.
Aicountly Income Tax Desk · Aug 6, 2026
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