1. What is TDS Interest for Late Payment?

TDS (Tax Deducted at Source) interest is charged when the deductor fails to deduct tax at source or after deducting fails to pay it to the government within the due date. This calculator helps compute the interest payable for such late payments.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( principal \) — The TDS amount in INR
• \( rate \) — The applicable interest rate percentage
• \( time \) — The delay period in months

Explanation: The interest is calculated as simple interest on the principal amount for the period of delay at the prescribed rate.

3. Importance of TDS Interest Calculation

Details: Accurate interest calculation is crucial for compliance with tax laws, avoiding penalties, and ensuring proper financial planning for tax liabilities.

4. Using the Calculator

Tips: Enter the principal amount in INR, the applicable interest rate percentage, and the time period in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the current TDS late payment interest rates?
A: As per Income Tax Act, Section 201(1A), interest is 1% per month or part thereof for late deduction and 1.5% per month for late payment after deduction.

Q2: How is the time period calculated?
A: Time is calculated in months or part thereof from the due date of deduction/payment to the actual date of payment.

Q3: Is this interest tax-deductible?
A: No, interest paid under Section 201(1A) is not allowed as deduction under any head of income.

Q4: Can this calculator be used for advance tax interest?
A: No, this is specifically for TDS late payment interest. Advance tax interest calculations are different.

Q5: What if TDS is paid in installments?
A: Interest should be calculated separately for each installment based on its delay period.