1. What is TDS Interest Calculation?

TDS (Tax Deducted at Source) interest is charged when the deductor fails to deduct tax or after deducting fails to pay it to the government. The interest is calculated from the date tax was deductible to the date it is actually paid.

2. How Does the Calculator Work?

The calculator uses the TDS interest formula:

Where:

• \( amount \) — The principal amount on which TDS was applicable (INR)
• \( rate \) — The applicable interest rate (%)
• \( days \) — Number of days delayed

Explanation: The formula calculates simple interest for the period of delay using the specified rate.

3. Importance of TDS Interest Calculation

Details: Accurate TDS interest calculation is crucial for compliance with tax laws and to avoid penalties. It helps taxpayers understand their liabilities when there are delays in TDS payment.

4. Using the Calculator

Tips: Enter the principal amount in INR, the applicable interest rate in percentage, and the number of days delayed. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the standard TDS interest rates?
A: Typically 1% per month (12% annually) for late deduction and 1.5% per month (18% annually) for late payment.

Q2: How are days calculated for TDS interest?
A: Days are calculated from the date tax was deductible to the date it is actually paid to the government.

Q3: Is this interest tax-deductible?
A: No, interest paid under section 201(1A) is not deductible from income.

Q4: What if the delay spans multiple financial years?
A: The calculation remains the same, but the applicable rate might change if tax laws are amended.

Q5: Can this calculator be used for advance tax interest?
A: No, this is specifically for TDS interest. Advance tax interest has different calculation methods.