TDS Interest Calculator
Calculate interest and penalties on late TDS payments under Indian tax laws. This calculator covers Section 195, 195A, and other TDS provisions with interest calculations under Section 201(1A) of the Income-tax Act, 1961.
Interest Summary
Interest Details
Current Rates
Understanding TDS Interest and Penalties
TDS (Tax Deducted at Source) interest is charged when TDS payments are made after the due date. Under Section 201(1A) of the Income-tax Act, 1961, interest is calculated at 1.5% per month or part of month on the outstanding TDS amount.
Section 201(1A) Interest Calculation
How TDS Interest is Calculated
Interest = TDS Amount × Rate × (Days Late ÷ 30)
Interest Rate
1.5% per month (18% per annum)
Simple interest, not compound
Calculated on monthly basis
Time Period
From due date to payment date
Part of month counts as full month
Minimum 1 month interest
TDS Due Dates
| TDS Section | Due Date | Frequency |
|---|---|---|
| Section 192 (Salaries) | 31st July | Annual |
| Section 193 (Interest) | 31st July | Annual |
| Section 194 (Dividends) | 31st July | Annual |
| Section 195 (Non-residents) | 7th of next month | Monthly |
| Section 195A (Interest) | 7th of next month | Monthly |
Types of TDS Defaults
Late Payment
- TDS deducted but paid after due date
- Interest under Section 201(1A)
- 1.5% per month on TDS amount
- No penalty if paid within grace period
Short Deduction
- Less TDS deducted than required
- Interest on difference amount
- Penalty under Section 271C
- Can be contested if bona fide belief
Section 195 TDS Special Rules
Section 195 deals with TDS on payments to non-residents. The due date is the 7th of the month following the quarter. Interest is calculated from the due date to the actual payment date at 1.5% per month.
Grace Period and Concessions
There is generally no grace period for TDS payments. However, the CBDT may condone delays in exceptional circumstances. Late payment fees may also apply in addition to interest.
Penalty for Non-deduction
If TDS is not deducted at all, penalties under Section 271C can be imposed. The penalty is equal to the TDS amount that should have been deducted. Interest under Section 201(1A) also applies.
Interest Calculation Examples
TDS Interest Calculation Examples
Example 1: 2 Months Late
TDS Amount: INR 50,000
Months Late: 2
Interest: INR 50,000 × 1.5% × 2 = INR 1,500
Example 2: Section 195 (15 Days Late)
TDS Amount: INR 1,00,000
Days Late: 15 (counts as 1 month)
Interest: INR 1,00,000 × 1.5% × 1 = INR 1,500
TDS Return Filing
TDS returns must be filed quarterly or annually depending on the section. Late filing attracts penalties. The returns include details of deductees, TDS amounts, and interest paid.
Recovery of TDS Interest
The deductor is liable to pay interest under Section 201(1A). However, they can recover this amount from the deductee. For Section 195, the payer can recover from the payee.
Key Takeaways for TDS Interest
- Interest charged at 1.5% per month under Section 201(1A)
- Calculated from due date to payment date
- Part of month counts as full month
- Applicable for late payment, short deduction, and non-deduction
- Different due dates for different TDS sections
- Section 195 has monthly due dates (7th of next month)
- Interest can be recovered from deductee
- Late filing of returns attracts additional penalties
- No grace period for TDS payments
- Simple interest, not compound interest