I have paid tds on 8th October for the month of September since 7th was Sunday. Shall I need to pay interest and if yes than how much? Please help.
From India , Mumbai
there is no need to pay any extra charges bocouse late due to holiday and this is permiseble by it act. So dont worry and be relax in the matter.
From India, Allahabad
Dear Mr. Mehul Vora,

The recipient from whose income tax has been deducted at source gets the credit of the amount deducted in his personal assessment on the basis of the certificate issued by the deductor. The deducted sum is required to be deposited to the credit of the Central Government. The deductor of the Income Tax is required to deposit the tax deducted with in the specified time with Income Tax Department.
The deductor is required to deposit the tax deducted with in seven day of the next month. In the case of March, the deductor can deposit the tax deducted by 30th April. If the assessee does not deduct the tax or after deduction does not deposit it, he is required to pay the interest u/s 201(1A). Section 210(1A) states as under:
“(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,
(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and
(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.
After studying the provision of Section 201(1A) (i), it is clear that the interest for non-deduction of TDS will be paid from the date on which the tax is required to be deducted to the date of actual deduction @1% and from the date of deduction to the date of actual payment @1.5% p.m.
This has been a matter of dispute that what should be the definition of month as emphasized above. The definition of month has not been defined in the Income Tax Act, 1961. Whether while counting the no. of months for the purpose of calculation of interest, it should be considered as a calendar month as per General Clauses Act or it means a period of thirty days.
CPC – TDS is using TDS Reconciliation Analysis and Correction Enabling System (‘TRACES’) for processing the e-tds return. The software which has been used by it takes the definition of month as calendar month and due to which it has become a nightmare for the assessee.
For e.g. If an assessee has made a transaction of Rs. 5 Crores on January 31, 2014 and required to pay Rs. 50 lakhs as TDS on that amount. He deducted the TDS and required to pay the amount on February 7, 2014. Unfortunately he made the payment on February 8, 2014. For a delay of a single day as per the Software of the TRACES, he will be required to pay interest for two month i.e. January and February @ 3%. If will get a demand calculated @3% from the TRACES as soon as he will file the return.

Since the act says TDS should be deposited within Seven Days, not a single day will be granted extra. You should deposit tax a day before if the last day is holyday.

Hope this will clear all your doubts.


From India , Morvi

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