1. Deduction Details
2. Deposit Details
We will automatically calculate the due date based on your deduction date.
3. Return Filing Details (Optional)
Leave blank if you haven't filed yet or if not applicable.
Total Payable Summary
Total Amount to be Paid
Original TDS Amount
The principal amount deducted
Late Deduction Interest (1%)
Delayed by 0 month(s)
Late Deposit Interest (1.5%)
Delayed by 0 month(s)
Late Filing Fee (Sec 234E)
₹200/day for 0 day(s)
Note on IT Act Rules
As per Income Tax rules, a fraction of a month is considered a full month. For example, if you delay deposit by just 1 day into the next calendar month, interest for 2 full months is charged. The 234E late fee is capped at the total TDS amount.
Understanding TDS Late Payment Penalties
1. Interest on Late Deduction (1%)
Under Section 201(1A) of the Income Tax Act, businesses and deductors face mandatory interest penalties for failing to deduct or deposit Tax Deducted at Source (TDS) on time. Penalties accrue at 1% per month for delay in deduction and 1.5% per month for delay in deposit.
Because TDS interest penalties cannot be waived by tax officers or claimed as business expense deductions, timely computation is critical. Check penalties for delayed self-assessment with our advance tax penalty calculator and plan upcoming quarterly tax outlays on our advance tax calculator. Compute landlord rent deductions on our TDS on rent calculator, verify banking deposit withholdings on our TDS on FD calculator, calculate annual liabilities on our income tax calculator, and evaluate employee tax withholding on our salary breakup calculator.
Calculation Period: From the date TDS was deductible up to the date it was actually deducted.
2. Interest on Late Deposit (1.5%)
Once TDS is deducted, it must be deposited to the government by the 7th of the following month. If delayed, interest of 1.5% per month or part of a month is levied.
Calculation Period: From the exact date of deduction up to the exact date of actual deposit. (Not from the due date).
The "Part of a Month" Trap (Worked Example)
The Income Tax Department calculates interest based on calendar months touched, not flat 30-day periods. This means a 1-day delay can trigger a 2-month interest penalty.
- Scenario: You deduct TDS on 31st May. The due date to deposit is 7th June.
- Mistake: You deposit it on 8th June (1 day late).
- Penalty: The deposit touched two calendar months (May and June). Therefore, 1.5% x 2 months = 3% penalty is levied on the entire TDS amount.
3. Section 234E Late Filing Fee
Apart from depositing the tax, you must file a quarterly TDS return (Form 24Q, 26Q, etc.). Section 234E enforces a flat late fee of ₹200 per day for every day of delay until the return is filed. The total late fee cannot mathematically exceed the original TDS amount for that quarter.
TDS Delay Penalties: Section 201(1A) & Late Filing Fee under Section 234E
| Default Nature | Statutory Penalty Section | Interest Rate / Fee Amount | Calculation Period Window |
|---|---|---|---|
| Failure to Deduct TDS on Payment | Section 201(1A)(i) | 1.0% per month (or part of month) | From date tax was deductible to actual deduction date. |
| Delay in Depositing Deducted TDS to Govt | Section 201(1A)(ii) | 1.5% per month (or part of month) | From date of deduction to actual date of deposit. |
| Late Filing of TDS Quarterly Return | Section 234E | ₹200 per day of delay | Runs until return is filed (Capped at total TDS amount). |
Frequently Asked Questions
Is there any grace period for TDS deposit?
Can I claim TDS interest as a business expense?
What if the due date falls on a Sunday or Bank Holiday?
How is the month calculated if I deduct on 30th April and deposit on 5th May?
What is Section 271H Penalty?
6. Do I need to file an ITR if my income is below the basic exemption limit?
7. What is the difference between Old and New Tax Regime?
8. Can I switch back to the Old Tax Regime?
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