1. What is TDS Interest?

TDS (Tax Deducted at Source) interest is charged when the deductor fails to deduct tax at source or after deducting fails to pay it to the government. The current interest rate is 1.5% per month or part of a month.

2. How Does the Calculator Work?

The calculator uses the TDS interest formula:

Where:

• \( TDS \) — Tax Deducted at Source amount in INR
• \( 0.015 \) — Monthly interest rate (1.5%)
• \( months \) — Number of months late

Explanation: The interest is calculated at 1.5% per month or part thereof on the TDS amount from the date it was deductible to the date it is actually deducted/paid.

3. Importance of TDS Interest Calculation

Details: Accurate interest calculation is crucial for compliance with tax laws, avoiding penalties, and proper financial planning for tax liabilities.

4. Using the Calculator

Tips: Enter the TDS amount in INR and the number of months late. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current TDS interest rate?
A: The current interest rate is 1.5% per month or part of a month for late deduction or payment of TDS.

Q2: Is the interest compounded or simple?
A: The interest is simple interest, calculated at 1.5% per month on the TDS amount.

Q3: Are there any penalties in addition to interest?
A: Yes, there may be additional penalties under Section 271H for failure to deduct or pay TDS.

Q4: How is partial month calculated?
A: Any part of a month is considered as a full month for interest calculation purposes.

Q5: Can this interest be waived?
A: In rare cases, the assessing officer may waive interest if the delay was due to reasonable cause.