TDS Interest Calculator: Late Payment, Deduction, & Penalty

HostBooks TDS Interest Calculator is an online tool designed to calculate the interest on late payment, deduction of Tax Deducted at Source (TDS)/ Tax Collected at Source (TCS) and late filing of TDS/ TCS return. This calculator simplifies the process of determining the interest amount that needs to be added to the total TDS challan to be paid.

An online TDS interest calculator is a digital tool available on the internet that helps users calculate the interest amount on late payment or deduction of Tax Deducted at Source (TDS), based on the TDS amount, due date, and actual payment or deduction date.

The First step in using HostBooks TDS late payment interest calculator, start by selecting the appropriate calculator based on your specific requirement.

1. TDS Late Payment Interest Calculator: Use this calculator when you need to calculate the interest on late deposit of TDS.

2. TDS Late Deduction Interest Calculator: Select this calculator if you want to calculate the interest on late deduction of TDS.

3. TDS Late Filing Penalty Calculator: Choose this calculator to determine the penalty for late filing of TDS returns.

Choose this calculator to determine the penalty for late filing of TDS returns.

Enter the TDS amount: The amount of TDS deducted, deposited or to be deposited for the given month/period. For the late fee for TDS return filing add the TDS liability of the months of the quarter.

Select the Period: Enter the date/month/ quarter for which the late fee or interest is to be calculated. For interest on late deduction of TDS, exact date of payment/ due date must be mentioned.

Actual deposit/deduction/filing date: The date on which the TDS amount was deposited, deducted, or the return is to be filed.

Click on the "Calculate" button: After entering the necessary details, click on the "Calculate" button provided by the calculator.

Here are some of the advantages of using HostBooks TDS interest calculator:

1. Accuracy: The calculator ensures accurate calculations by applying the correct interest rates and considering the specific rules and regulations related to TDS late payment.
2. Timesaving: The calculator ensures accurate calculations by applying the correct interest rates and considering the specific rules and regulations related to TDS late payment.
3. Compliance: You can ensure compliance with the rules and regulations regarding TDS late payment and interest charges using TDS interest on late payment calculator. It helps you avoid any miscalculations or penalties due to incorrect calculations.
4. Easy to use: The calculator is user-friendly and requires minimal input. You just need to provide the necessary details, and it will handle the calculations for you.
5. Comprehensive: The calculator considers different scenarios, including late deposit, late deduction, and late filing of TDS/TCS return, ensuring all aspects of TDS late payment interest are covered.

TDS is a mechanism through which the government collects tax directly from the taxpayer's income at the time of payment. TDS is deducted by the payer and deposited with the government on behalf of the payee.

The deduction should be based on TDS Rate FY(2023-24) for specified by the Income tax Department. (Interlink TDS chart rate)

The deducted amount in TDS belongs to the government, and the payer is responsible for its timely deposit. The delayed deposit of TDS means the government does not receive the tax amount on time. This delay impacts the government's cash flow and results in an opportunity cost.

Therefore, to compensate for the delay, interest is charged on the late deposit of TDS.

There are three types of late fees payable for TDS as follows.

The amount of TDS deducted needs to be deposited by the 7^th of the subsequent month. If the TDS is not deposited by the 7^th of the subsequent month, interest of 1.5% per month is chargeable.

The interest is chargeable from the due date of deposit to the actual date of deposition. Since the interest on late payment of TDS is calculated on monthly basis even a delay of one day is considered as a full month for interest calculation.

Note: For TCS The rate of interest charges is 1%

Example

If the TDS of Rs. 10,000 is deducted on April 15 but deposited on May 10, the interest will be calculated for one month (May) at the rate of 1.5% per month even though its just 2 days later.

Due date 7^th of Subsequent month, if not deposited at 7^th TDS is charged at 1.5% each month any part of month is considered full month.

Late deduction of TDS refers to a situation where the tax deduction at source is not made at the time of payment or is delayed beyond the due date.

The date of TDS deduction should be the date on which payment is made.

In such cases, interest is chargeable on the late deduction of TDS from the date on which TDS was supposed to be deducted to the date on which the payment is deducted.

The interest is calculated at a rate of 1% per month or part there of any part of month calculated as whole month.

Late filing of TDS/TCS return refers to the situation where the taxpayer fails to submit the TDS return within the prescribed due date. The due date for filing the TDS return is the last date of the subsequent month when the quarter ends, except for the last quarter with the last date is May 31^st.

In the case of late filing, a penalty is imposed for each day of delay, amounting to Rs. 200 per day, up to the total amount of TDS deposited.

Here's the table for the last date of filing TDS returns for each quarter:

Example

Consider a taxpayer needs to file the TDS return for the 1^st quarter on the due date July 31^st but files the return on August 31^st. The total tax liability is Rs 5000

The return is filed on August 31^st (with a delay of 31 days), the penalty would be lower of the following.

1. Total Tax Liability: Rs 5000
2. Total Penalty per day: Rs. 6,200 (31 days x Rs. 200).

Total Penalty per day: Rs. 6,200 (31 days x Rs. 200).

As per Section 271H of Income Tax Act ,1961 Assessing offices (AO) can impose a penalty of not less than 10,000 up to 1,00,000 in case of non-filing, delayed filing or wrong filing od TDS return.

The penalty could be waived if certain conditions are satisfied. Visit IncomeTax of India Website

To calculate the interest on late payment of TDS, the formula is:

Interest = TDS amount * Interest rate * Number of months

Example calculation: Let's assume a TDS amount of Rs. 50,000 is due for deposit on April 7^th, 2023, but it is deposited on May 20th, 2023.

Step 1: Calculate the number of months (including part of a month) for which interest is applicable.

• April: 1 month
• May: 1 month (even for the Part)

Step 2: Calculate the interest.

• Interest rate = 1.5% per month
• Interest Payable = Rs. 50,000 * 1.5% * 2 months = Rs. 1,500