Find
Under Sec 201(1A) (now Sec 398(3)), interest is 1% a month or part of a month from the date TDS was deductible to the date it was deducted, and 1.5% a month from the date it was deducted to the date it was paid.
ITR
Interest for late deduction or late payment of TDS
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Provisions
Sec 201(1A), Income-tax Act 1961 (now Sec 398(3), Income-tax Act 2025); Sec 201, Income-tax Act 1961 (now Sec 398, Income-tax Act 2025)
Analysis
Each part of a month counts as a full month. Example: TDS of ₹20,000 deducted on 25 June but paid on 10 August (due 7 July). Interest is 1.5% for June, July and August, that is 3 months, so ₹900. If the TDS was deductible in May but deducted in June, add 1% for the late deduction period too. Pay the interest through a challan for the same TAN, year and section.
Close
- List deduction, deposit and due dates for each payment
- Count months, treating part months as full
- Compute 1% and 1.5% interest separately
- Pay through e-Pay Tax for the right year and section
- Tag the interest challan in a correction statement
Connect now
A Savvy replies in minutes.
Fixed price before you pay. Your Savvy is paid only after you accept the work.
General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.