TDS Interest Calculator

Work out interest payable under Section 201(1A) of the Income Tax Act for TDS that was deducted late or deposited late with the government, using the standard 1% and 1.5% per-month rates.

Quick Facts

Late deduction
1% per month
Charged from the date tax was deductible to the date it was actually deducted.
Late deposit
1.5% per month
Charged from the date of deduction to the date TDS is deposited with the government.
Month counting
Part-month = full month
Any part of a calendar month is treated as a complete month under Section 201(1A).

Your Results

Calculated
Interest on late deduction
-
At 1% per month
Interest on late deposit
-
At 1.5% per month
Total interest payable
-
Sum of both interest legs
Total amount payable
-
TDS amount plus total interest

Ready

Enter the TDS amount and the three dates, then press Calculate.

How to use the TDS Interest Calculator

When a deductor fails to deduct tax at source on time, or deducts it but deposits it late with the government, Section 201(1A) of the Income Tax Act, 1961 makes the deductor liable to pay simple interest on the delayed amount. This calculator works out both interest legs from the TDS amount and the relevant dates.

The two interest legs

  • Late deduction — 1% per month: charged from the date the tax was deductible (usually the date of payment or credit to the payee, whichever is earlier) to the date it was actually deducted.
  • Late deposit — 1.5% per month: charged from the date the tax was actually deducted to the date it was actually paid into the government account.
  • Simple interest, not compounded: both legs are calculated as amount × rate × number of months, with no compounding between periods.

How months are counted

Interest under Section 201(1A) is charged per calendar month or part of a month — it is not prorated by days. If a delay of even one day crosses from one calendar month into the next, the law treats it as two full months of interest, not a fraction. This calculator applies that same part-month-counts-as-a-full-month rule to both the late-deduction and late-deposit periods.

Worked example

Suppose ₹50,000 of TDS was deductible on 10 January but was actually deducted on 25 January (still within January, so 1 month of late-deduction interest at 1% = ₹500). It was then deposited with the government on 15 April — spanning parts of January and April plus all of February and March, which counts as 4 months of late-deposit interest at 1.5% = ₹3,000. Total interest payable is ₹3,500, on top of the ₹50,000 TDS itself.

What this calculator does not cover

This tool computes interest under Section 201(1A) only. It does not calculate late-filing fees under Section 234E, penalties under Section 271H, or interest on TDS return corrections. It also assumes the dates you enter are accurate — always reconcile against your TRACES records and challan dates before filing or paying.

Frequently Asked Questions

What interest rates apply to late TDS deduction and deposit?
Under Section 201(1A) of the Income Tax Act, interest is charged at 1% per month (or part of a month) for late deduction of TDS, calculated from the date the tax was deductible to the date it was actually deducted. A separate 1.5% per month (or part of a month) applies for late deposit, calculated from the date of deduction to the date the tax is actually paid to the government.
How is a part of a month counted?
Any part of a calendar month is treated as a full month for TDS interest purposes. For example, if TDS is deducted just one day late but the delay crosses into a new calendar month, interest is charged for two full months rather than being prorated by days.
Is TDS interest deductible as a business expense?
No. Interest paid under Section 201(1A) is a penal interest for delay in complying with TDS provisions and is not allowed as a deductible business expense under the Income Tax Act.

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