TDS Late Payment Interest Calculator
Missed a TDS deduction or deposited it after the 7th? Enter your dates and see the Section 201(1A) interest the way TRACES counts it, month by month, plus any late filing fee under Section 234E.
Deposit is due on the 7th of the next month. Tax deducted in March is due by 30 April.
Financial year taken from the deduction date.
₹200 a day from the due date, capped at the TDS amount.
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How to calculate interest on late TDS payment
Section 201(1A) charges simple interest on the TDS amount for every month or part of a month the tax stays with you. Late deduction costs 1% a month and late deposit costs 1.5% a month, and a part month counts as a full one.
The tax you should have deducted on the payment or credit. Take it from your TDS working, the vendor ledger or the challan you are about to pay.
Example: 10% TDS on a ₹25 lakh professional fee = ₹2,50,0001% a month if the tax was deducted late, 1.5% a month if it was deducted but deposited late. Both can apply to the same amount for different stretches.
Example: deducted on time, deposited after the 7th = 1.5%Calendar months touched by the delay, counting the start and end months in full. Read the dates from the invoice booking entry, the payment voucher and the challan (CIN) date.
Example: deducted 31 Mar, deposited 1 Apr = 2 monthsRuns from the date tax was deductible (invoice credit or payment, whichever came first) to the date you actually deducted it.
TDS × 1% × months from deductible to deductedApplies once you miss the deposit due date, but it is counted from the date of deduction, not from the due date.
TDS × 1.5% × months from deducted to depositedA flat ₹200 a day from the return due date until you file, never more than the TDS in that return.
min(₹200 × days late, TDS amount)| TDS amount | ₹2,50,000 |
| Deductible 10 Jun, deducted 31 Jul | 2 months × 1% = ₹5,000 |
| Deducted 31 Jul, deposited 8 Aug | 2 months × 1.5% = ₹7,500 |
| Interest under Section 201(1A) | ₹12,500 |
- Count late deduction months: June and July are touched, so 2 months at 1% on ₹2.5 lakh = ₹5,000
- Check the deposit due date: tax deducted in July was due by 7 August, and 8 August is late
- Count from deduction to deposit: July and August, so 2 months at 1.5% = ₹7,500
- Pay ₹12,500 interest with the tax in the same challan, before you file the return
TDS interest rates and due dates
These are the rules TRACES applies when it raises a short payment or late payment demand. Keep the challan date, not the bank debit date, as your deposit date.
| Default | Charge | How it is counted |
|---|---|---|
| Tax not deducted, or deducted late | 1% a month | From the date tax was deductible to the date it was deducted, part month as full month |
| Tax deducted but deposited late | 1.5% a month | From the date of deduction to the date of deposit, part month as full month |
| Monthly deposit due date | 7th | 7th of the following month for tax deducted from April to February |
| March deductions | 30 April | Tax deducted in March can be deposited until 30 April |
| Late TDS return (Section 234E) | ₹200 a day | From the return due date to the filing date, capped at the TDS amount |
| Quarterly return due dates | 31 Jul, 31 Oct, 31 Jan, 31 May | For Q1, Q2, Q3 and Q4 respectively |
Based on Section 201(1A) and Section 234E as carried into the Income-tax Act, 2025. Check the latest notifications before you pay.
Get a one-page summary with the months counted, interest at each rate and any late filing fee, ready for your tax team.
How to avoid TDS interest
Almost every TDS interest demand traces back to a missed booking date or a challan paid a day late. A few habits close most of the gaps.
TDS is due on credit or payment, whichever is earlier. Deduct the moment the invoice is booked, including provisions at year end.
Bank and portal delays happen. Paying two days early keeps you clear of the 1.5% charge, which bites from the date of deduction.
March deductions get until 30 April, but year-end provisions and missed bills often surface late. Review them before the window closes.
Mismatched PANs and wrong sections lead to short deduction notices. Matching your books to Form 26AS each month, for example with a TDS reconciliation template, catches them early.
Include interest in the challan before filing the quarterly return, so the statement goes in clean and no demand is raised.
The 234E fee grows by ₹200 every day. Even a short delay on a small return can wipe out the whole TDS amount in fees.
Frequently asked questions
Multiply the TDS amount by the rate and the number of months. Late deduction attracts 1% a month from the date tax was deductible to the date it was deducted. Late deposit attracts 1.5% a month from the date of deduction to the date of deposit. Any part of a month counts as a full month.
TRACES counts calendar months. Every calendar month touched by the delay counts in full, including the first and last. So tax deducted on 31 March and deposited on 1 April counts as 2 months, even though only one day passed.
The 1.5% interest is triggered only if you deposit after the due date, but once it applies it runs from the date of deduction. That is why paying even one day after the 7th can cost two months of interest.
Section 234E charges ₹200 for every day of delay from the return due date until you file, capped at the total TDS in that return. The fee must be paid before the return is accepted.
If a TDS return is not filed within one year of the due date, or is filed with incorrect details, the assessing officer can levy a penalty of ₹10,000 to ₹1 lakh under Section 271H. It does not apply if tax, interest and fee are paid and the return is filed within one year.
No. Interest under Section 201(1A) is compensatory interest on a tax default and courts have generally held that it is not deductible as a business expense. Treat it as a cost of the delay.
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