TDS Interest Calculator - Calculate Late Payment & Deduction Penalty

Interest on late TDS payment is 1.5% per month or part thereof. This applies when TDS is deducted but not deposited to the government on time. The interest is calculated from the date of deduction to the date of actual payment. Part of a month is counted as a full month for calculation purposes.

Interest on late TDS deduction is 1% per month or part thereof. This applies when the deductor fails to deduct TDS at the time of payment. The interest is calculated from the date when TDS should have been deducted to the actual date of deduction. Part of a month is considered as a full month.

TDS interest for late payment is calculated as: Interest = TDS Amount × 1.5% × Number of Months. The months are counted from the month of deduction to the month of payment. Any part of a month is treated as a full month. For example, if TDS of ₹10,000 is paid 3 months late, interest = ₹10,000 × 1.5% × 3 = ₹450.

TDS interest is calculated on a monthly basis, not daily. Even if the delay is for a single day in a month, interest for the entire month is charged. This makes early payment crucial to avoid additional interest. The interest is simple interest, not compound interest.

Section 201(1A) of the Income Tax Act specifies two interest rates: (a) 1% per month for failure to deduct TDS - applicable from the date TDS was deductible to the date of actual deduction. (b) 1.5% per month for failure to pay TDS - applicable from the date of deduction to the date of actual payment to the government.