Procedure of calculating interest on Late Deduction of TDS

You have to deposit late deduction interest @ 1% per month or part of the month from the date of payment / credit to deductee till date of deduction.

Procedure for calculating Late Deduction:

Amount Paid /      TDS Deducted(Rs.)                         Interest Calculation

Credited(Rs.)                                      Date of Payment  Due Date of Deduction  Date of Deduction

                                                                      (dd-mmm-yyyy)     (dd-mmm-yyyy)         (dd-mmm-yyyy) 

100000.00                10000.00                        3-Mar-2012          3-Mar-2012              4-Mar-2012

Period of Delay in Months                    Interest on Late Deduction U/S 201 (1A)(Rs.)
 1                                                                               100.00

Correct Calculation

No. of months in Defaults=1 i.e., 3-Mar-2012 to 4-Mar-2012

10000*1%*1(Months) =100.00