Interest on Late Payment of TDS
In case the assesse deposits the TDS Payment after the due date of payment of the Tax deducted at source, he shall be liable to pay interest @1.5% for every month or every part of the month during which the amount is not deposited with the Govt. Earlier, the Interest liable to be paid was 1% but this has been increased to 1.5% pm with a view to discourage the practice of delaying the deposit of tax after deduction.
Interest @ 1.5% is liable to be paid from the date on which the TDS was deducted and not from the date the TDS was due. This can be explained with the help of an example.
For example: TDS was deducted on 25th June and the due date for TDS Payment was 7th July. The assessee fails to deposit the TDS by 7th July. In such a case, the Interest would be calculated from 25th June and not from 7th June.
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