# How is interest on late payment of TDS calculated?

## How is interest on late payment of TDS calculated?

Interest on Late Deduction = 12300 * 2 months * 1/100 = 246. Under Section 201(1A), you will have to pay interest of 1.5% per month or part of the month, from the Date of Deduction(of TDS) to the Date of Payment.

## What is the limit of interest for TDS?

Section 194A TDS on Interest (other than Interest on Securities)

Payer Threshold limit (₹) (w.e.f. 01.04.2019) Threshold limit (₹) for Senior Citizen (w.e.f. 01.04.2018)
Co-operative whose turnover exceeds Rs 50 Crores during the previous financial year 40,000 50,000
Post office (on SCSS) 40,000 50,000
Any other person 5,000 5,000

How do you calculate interest on late payments?

To calculate the interest due on a late payment, the amount of the debt should be multiplied by the number of days for which the payment is late, multiplied by daily late payment interest rate in operation on the date the payment became overdue.

### How is TDS interest and penalty calculated?

For example, say the payable TDS amount is Rs 5000 and the date of the deduction is 13th January. TDS payment date for that deduction is on 17th May. Then the interest payable is Rs 5000 x 1.5% p.m. x 5 months = Rs 375 (from the month of January to the month of May).

### Is TDS deducted on saving interest?

Savings Bank Account – Interest Income Do note that bank does not deduct TDS on savings bank interest. Interest from both fixed deposit and recurring deposits is taxable while interest from savings bank account and post office deposits are tax-deductible to a certain extent.

How much interest on FD is taxable?

Interest earned from bank fixed deposits is fully taxable for individuals, while senior citizens can claim a deduction of up to ₹50,000 against the interest earned on savings and fixed deposit interest. Senior citizens claiming deduction, have to show it in the income tax return (ITR).

## What is interest amount formula?

The interest rate for a given amount on simple interest can be calculated by the following formula, Interest Rate = (Simple Interest × 100)/(Principal × Time) The interest rate for a given amount on compound interest can be calculated by the following formula, Compound Interest Rate = P (1+i) t – P.

## What is the formula to calculate interest?

Here’s the simple interest formula: Interest = P x R x N. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). N = Number of time periods (generally one-year time periods).