What is the interest rate for the late deduction of TDS?

If TDS was not deducted at the time of payment or credit, interest is charged at 1% per month or part of a month from the date it should have been deducted until the actual date of deduction.

How many months are counted for the TDS interest calculation?

Interest is calculated from: The date TDS was required to be deducted (for late deduction), or The due date of the deposit (for a late deposit), until the actual date of deduction or payment. Any part of a month is counted as a full month.

Is interest applicable for a one-day delay in TDS payment?

Yes. Under Section 201(1A), even a one-day delay is treated as a delay of one full month. Interest will apply at: 1% per month (late deduction), or 1.5% per month (late deposit).

Can TDS interest be waived?

Generally, TDS interest cannot be waived because it is mandatory under the Income Tax Act. The tax authorities charge it automatically for late deduction or late deposit. In rare cases, relief may be granted by higher authorities under specific conditions, but this is not common.

Why should I use an online TDS Interest Calculator?

An online TDS Interest Calculator helps you: Instantly compute interest liability Avoid manual calculation errors Apply the correct 1% or 1.5% rate Ensure compliance with Section 201(1A) It provides quick and accurate results for delayed TDS payments.

TDS Interest Calculator Online

Use RegisterKaro’s online TDS Interest Calculator to compute interest on delayed TDS payments under Section 201(1A) instantly. Simply enter the TDS amount, statutory due date, and actual deposit date to calculate the exact interest payable in seconds.

TDS Interest Calculator

Enter Amount Of Tax Deducted

₹

Type Of Interest Calculation

Due Date Of Return Filing

Date Of Return Filing

Please select both start and end dates

Delayed deposit of TDS can result in interest liability under Section 201(1A) of the Income Tax Act. Calculating the correct monthly interest rate for delays can be tricky. Even small mistakes in these calculations can result in compliance issues or extra penalties.

RegisterKaro’s Free TDS Interest Calculator eliminates this complexity by instantly computing the applicable interest based on the statutory due date and actual payment date. This tool helps businesses and deductors determine the exact payable amount quickly and stay compliant.

What is the TDS Interest Calculator?

A TDS Interest Calculator is an online tool designed to calculate interest on delayed TDS payments quickly and accurately. It helps deductors determine the interest payable under Section 201(1A) of the Income Tax Act for various types of TDS, including salary payments, professional fees, contractor payments, and interest income.

How Does the TDS Interest Calculator Help You?

Calculating interest on late TDS deposits manually can be complicated, especially when applying monthly interest rates based on the type and duration of delay. An online TDS Interest Calculator simplifies this process and offers several benefits:

Saves Time: Quickly calculates interest without manual computation.
Accurate Results: Applies correct interest rates as prescribed under the Income Tax Act.
Avoids Errors: Minimizes the risk of incorrect calculations and compliance mistakes.
Compliance Ready: Helps businesses and deductors avoid penalties due to miscalculation.
User-Friendly: Requires only basic inputs such as TDS amount, due date, and payment date.
Better Record-Keeping: Provides a clear breakdown of interest liability, making it easier to maintain financial records and support audit documentation.
Supports Tax Planning: Helps you estimate potential interest in advance, allowing better cash flow management and timely tax payments.

Its simple, user-friendly interface makes calculating interest on delayed TDS effortless for any payment scenario.

Types of TDS Interest Calculations: Late Deduction vs Late Deposit

Interest on delayed TDS payments is calculated differently depending on whether the delay is in deduction or deposit. The TDS Interest Calculator covers both scenarios under Section 201(1A) of the Income Tax Act.

Late Deduction of TDS: Interest applies when tax is not deducted at the time of payment or credit. In such cases, interest is charged at 1% per month or part of a month from the date on which TDS was required to be deducted until the actual date of deduction.
Late Deposit of TDS: Interest applies when TDS has been deducted but not deposited with the government by the due date. In this case, interest is charged at 1.5% per month or part of a month from the due date of the deposit until the actual payment date.

Whether there is a delay in deduction or deposit, the TDS Interest Calculator automatically computes the applicable interest amount, helping businesses and deductors manage TDS compliance accurately and efficiently.

How is TDS Interest Calculated on Different Payments?

TDS interest varies depending on the type of payment, applicable TDS section, and statutory due date. Whether it's salary, professional bills, or fixed deposit interest, delayed TDS attracts interest under Section 201(1A).

1. How to Calculate TDS Interest on Salary?

TDS on salary is deducted by the employer based on applicable tax slabs.

If the TDS deducted is deposited late, interest under Section 201(1A) applies.
Use the TDS Interest Calculator by entering the TDS amount, due date, and actual deposit date to compute interest accurately.

2. How to Calculate TDS Interest on Bill Amount?

TDS on professional or contractual bills is deducted by the payer before payment.

When TDS deducted from professional or contractual bills is deposited late, interest applies.
The calculator computes interest for each bill based on its TDS due date.
The calculator can add interest from different bill delays to give the total payable interest.

3. How is TDS Interest on Fixed Deposit Calculated?

Banks deduct TDS on interest earned on fixed deposits if the interest exceeds the threshold limit.

If the TDS is not deposited on time, interest under Section 201(1A) applies.
The TDS Interest Calculator computes interest using the delayed TDS amount and the number of months overdue.

TDS Interest Calculation Formula with Example

To calculate interest on delayed TDS, the following formula is used under Section 201(1A) of the Income Tax Act, 1961:

Interest = (TDS Amount × Interest Rate × No. of Months Delayed in Filing) / (100)

TDS Amount: The portion of TDS that was deducted but not deposited on time.
Applicable Interest Rate:
- 1% per month for the delay in deduction of TDS
- 1.5% per month for the delay in the deposit of TDS
Number of Months of Delay: The period from the due date of the TDS deposit to the actual deposit date, counting any part of a month as a full month.

Example for TDS Interest Calculation

Ravi Sharma is a freelance consultant based in Mumbai. In July, Ravi completed a project for a client, and the client deducted Rs. 50,000 as TDS from his payment. The client was supposed to deposit this TDS with the government by 7th August, but due to a delay, the payment was made only on 21st September.

Now, to calculate the interest on the delayed TDS:

TDS Amount = Rs. 50,000
Period of Delay: 45 days (counted as 2 months, since part of a month is considered a full month)
Interest Rate: 1.5% per month (as per Section 201(1A))

Interest = (50,000 × 1.5 × 2) / (100) = Rs.1,500

So, Ravi's client needs to pay Rs. 1,500 as TDS interest in addition to the Rs. 50,000 TDS deposited late.

How to Use RegisterKaro's Free TDS Interest Calculator Online?

RegisterKaro's Free TDS Interest Calculator online allows you to instantly compute interest on delayed TDS payments under Section 201(1A) of the Income Tax Act. It is designed for employers, professionals, businesses, and financial institutions to calculate TDS interest accurately without manual calculations.

Follow these simple steps to use RegisterKaro's Free TDS Interest Calculator online:

1. Enter the TDS Amount

Fill in the exact TDS amount deducted.
This may include TDS on salary, professional fees, contractor payments, or fixed deposit interest.

2. Select the Statutory Due Date

Choose the date when the TDS was supposed to be deposited with the government.
The due date varies depending on the TDS type (e.g., the 7th of the next month for salary, the 30th of the month for professional payments).

3. Enter the Actual Deposit Date

Enter the date you actually deposited the TDS.
This allows the calculator to compute the exact delay period.

4. Click on "Calculate"

The tool will automatically compute the applicable interest at 1% or 1.5% per month, depending on the type of delay, and display the total interest payable.

By following these steps, you can determine your TDS interest liability accurately, avoid penalties, and ensure full compliance with Income Tax regulations.

Frequently Asked Questions

Interest on delayed TDS is calculated under Section 201(1A) of the Income Tax Act using the formula:

Interest = (TDS Amount × Applicable Interest Rate × Number of Months of Delay) ÷ 100

The applicable rate is:

1% per month for late deduction
1.5% per month for late deposit

Any part of a month is treated as a full month.

The TDS interest rate is 1.5% per month or part of a month on the late deposited TDS amount. This rate is prescribed under Section 201(1A) of the Income Tax Act, 1961. The interest is applied from the deposit's due date to the actual payment date, and even a partial month is counted as a full month. This means that any delay, even by a single day, attracts interest at 1.5% per month on the TDS amount that was deducted but not deposited on time.

RegisterKaro’s TDS Interest Calculator helps you instantly determine the exact interest payable on delayed TDS under Section 201(1A). It eliminates manual calculations, applies the correct 1% or 1.5% monthly interest rate automatically, and ensures accurate results based on the statutory due date and actual payment date. By using the tool, businesses and deductors can avoid errors, prevent penalties, and stay fully compliant with Income Tax regulations.