I deducted TDS but deposited it late. How much interest do I pay?
A business deducted TDS on a vendor payment and paid the government after the due date; asks how interest is counted.
1 Answer
Aicountly Income Tax Desk
Compliance
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Under Section 201(1A) of the Income-tax Act, interest on TDS that was deducted but not deposited is 1.5% per month, counted from the date the tax was deducted to the date it is actually deposited. Part of a month is counted as a full month, so a deposit even a few days after the due date attracts a full month's interest.
Separately, if the tax was not deducted at all or was deducted late, interest is 1% per month from the date it was deductible to the date it was deducted. The interest must be paid together with the TDS (challan with the interest column filled) before you file the TDS return; a late filing fee under Section 234E may also apply. For your specific dates, confirm the figure with your CA or tax advisor.
Aicountly Income Tax Desk · 1h ago
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