TDS Interest Calculator

What is the TDS Interest Calculator?

The TDS Interest Calculator helps you calculate the interest and late filing fees applicable on late deduction, late payment (deposit), or late return filing of Tax Deducted at Source (TDS) in India.

Under the Income Tax Act, 1961, any individual or organization making payments (like salaries, rent, professional fees, or contract payments) must deduct TDS at the source and deposit it with the government within specific due dates. Delay in deduction or payment attracts mandatory interest under Section 201(1A), and delay in filing returns attracts fees under Section 234E.

Rules for TDS Penalties & Interest

There are three primary categories of delays that attract charges:

1. Interest on Late Deduction of TDS (1% per month)

If tax is deductible but not deducted, or deducted late, interest is charged at 1% per month or part of the month.

Formula Period: Calculated from the date on which tax was deductible to the date on which tax is actually deducted.
Example: Even a single day of delay in a calendar month counts as a full month of interest.

2. Interest on Late Payment of TDS (1.5% per month)

If tax has been deducted but not deposited/paid to the government on or before the due date, interest is charged at 1.5% per month or part of the month.

Formula Period: Calculated from the date on which tax was deducted to the date on which it was deposited.
Payment Due Date: Generally, the TDS must be deposited by the 7th of the following month (except for March TDS, which is due by April 30th).

3. Late Return Filing Fee (Section 234E)

If you file the quarterly TDS return late, a fee of ₹200 per day of delay is levied.

Maximum Cap: The total late filing fee cannot exceed the principal TDS amount for that quarter.
Formula Period: Calculated from the due date of filing the TDS return to the actual date on which the return is filed.

Important TDS Due Dates Summary Table

TDS Activity	Due Date	Interest / Penalty Rate
Monthly TDS Deposit (April - February)	7th of the following month	1.5% per month or part of a month
Monthly TDS Deposit (March)	30th of April	1.5% per month or part of a month
Quarterly TDS Return Filing	31st of July, October, January, and May	₹200 per day (capped at TDS amount)

Frequently Asked Questions

Is a fraction of a month rounded up for TDS interest?

Yes. Under the Income Tax Act, any part of a month (even a single day) is considered a full month for interest calculations. For example, a delay of 1 month and 1 day will be treated as 2 months of interest.

Can interest on late payment be waived?

Interest under Section 201(1A) is mandatory and compensatory in nature. Wavier is rarely allowed and is only possible under exceptional circumstances via an appeal to the Commissioner of Income Tax.

What is the penalty if I do not deduct TDS?

In addition to paying interest at 1% per month on late deduction, you may face a penalty equal to the tax amount not deducted under Section 271C, and 30% of the corresponding expense will be disallowed for business income tax calculation.

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TDS Interest