Interest on Non Payment or Non Deduction of TDS. Interest on late payment/short deduction of TDS. Implementation of laws and regulations should be accompanied by penal provisions in order to get the purpose of the rules achieved. In income tax there very numerous provisions which talk about penalties for late payments, late deductions of tax , non deduction of tax in case of TDS.There's been a confusion among many readers about the computation of interest for late payment of tds and non deduction of tds. Here in this post I'm going to discuss some points on this concept. Now you can scroll down below and check more details for Interest on Non Payment or Non Deduction of TDS
Interest on Non Payment or Non Deduction of TDS
(1) Interest for non deduction of TDS / delay in payment of TDS :As per section 201, if any person who is liable to deduct tax at source does not deduct it, or after so deducting fails to pay, the whole or any part of the tax to the credit of the Government, then, such person, shall be liable to pay simple interest as given below:
Tax collected at source :
(2) Interest for failure to collect tax at source/delay in payment :As per section 206C(7), if the person responsible for collecting tax does not collect the tax or after collecting the tax fails to pay it to the credit of Government within the due date prescribed in this regard, then he shall be liable to pay simple interest at the rate of 1% per month or part thereof on the amount of such tax. Interest shall be levied for a
period from the date on which such tax was collectible to the date on which the tax was actually paid.