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- (Q1.)What is the Late payment interest?
- When Deductor deposits the TDS after due date of deposit, it is a case of late payment and interest will be charged accordingly. Interest on Late Payment will be calculated on the amount which has been paid after due date from the date of deduction till the date of deposit.
Note: If Date of Deduction of Tax will be the last date of the month, then that month will not be considered. - Interest at the rate 1.5% will be applicable on TDS deposited amount from the date on which tax was deducted to the date on which tax is actually paid.
Note:
• Prior to 1st July 2010 will be 1% per month.
• In case of TCS rate of Late Payment Interest is 1% - Late Payment interest is calculated @ 1.5% per month or Part of the month from the date of deduction+1 day till date of Deposit.
- Follow the steps mentioned below:
- The default amount will have to be deposited through challan number ITNS - 281 by ticking minor head '400' .
- After payment of Challan, User need to add challan to statement using "Online Correction Functionality - Add Challan to the Statement" available on TRACES website at Deductor Login.
- For closure of Late Payment default, fill up the amount in 'Interest' column and "Amount claimed as Interest" column in Challan details through Online Correction Functionality by clicking on "Request for Correction" under "Default" tab and select "Pay 220I,LP,LD, Interest ,Late Filing Levy" category .
- Once the Challan is added to the statement, further corrections can also be done by downloading latest Conso File.
- Tax deducted at source by an office of the Government shall be paid to the credit of the Central Government—
(a) On the same day where the tax is paid without production of an income-tax Challan; and
(b) Within seven days from the end of the month in which the deduction is made or income-tax is due, where tax is paid accompanied by an income-tax Challan. - Quarterly date of deposited of TDS:-Q1 (Apr to Jun) - 7 July, Q2 (Jul to Sep)- 7 OCT, Q3 (Oct to Dec)- 7 Jan, Q4 (Jan to Mar)- 30th April.
- As you deposited your tax with cheque on 7th January only, so there is possibility that your cheque realized after 7th January, so the late payment interest has been charged.
- Additional late payment will arise in correction statement, if Deductor has added new deductee rows and has given credit to deductee against newly paid Challan or modified Date of Deduction or have made changes in any unmatched Challan against which the TDS payment made
| Amount Paid / Credited (Rs.) 1* | TDS Deducted (Rs.) 2* | Date Of Deduction (dd-mmm-yyyy) 3* | Due date for TDS deposit (dd-mmm-yyyy) 4* | Date of Deposit as per OLTAS (dd-mmm-yyyy) 5* | Period of delay in month (dd-mmm-yyyy) 6* | Interest Late Payment U\S 201(1A) (Rs) (Col 2*6*1.5%) Period of Delay (in Months) |
|---|---|---|---|---|---|---|
| 100000.00 | 10000.00 | 10th June 2023 | 7th July 2023 | 8th August 2023 | 3 | 450.00 |
Procedure of calculating Late Payment Interest:
Calculation
No. of months in Defaults = 3
(Note: If date of deduction will be the last date of month for e.g: 30th June 2023 then June month will not be included and delay in month will be 2)
10000*1.5%*3(Months) = 450.00
