TDS interest
1% a month for deducting late and 1.5% for depositing late, counted in whole calendar months.
Credit or payment, whichever came first.
The challan-cum-statement forms have 30 days from the end of the month instead of the 7th.
Interest under section 201(1A)
₹9,000.00
| Tax deducted | ₹1,00,000.00 |
|---|---|
| Late deduction, at 1% a month3 calendar months, counting part of one as a whole. | ₹3,000.00 |
| Deposit was due | 7 July 2026 |
| Late deposit, at 1.5% a month4 calendar months from the date of deduction. | ₹6,000.00 |
| Interest payable | ₹9,000.00 |
How this worksShow
One day late costs three per cent
A month here is a calendar month, and part of one counts as a whole. So tax deducted on 5 May and deposited on 8 June — a single day past the due date — carries interest for two months: May, in which it was deducted, and June, in which it was paid. At 1.5% a month that is 3%.
It looks like a bug on screen and it is the correct answer, which is why this calculator shows the month count as its own line. A figure without it invites the reader to check the arithmetic and find it wrong.
| Rule | Figure | Statutory basis |
|---|---|---|
| Deducted after it fell due | 1% a month | s.201(1A)(i), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Deposited after the due date | 1.5% a month | s.201(1A)(ii), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| A month | a calendar month | s.201(1A), not defined in the section, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Deposit due | 7th of the next month | Rule 30, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| For March | 30 April | Rule 30, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| 26QB, 26QC, 26QD, 26QE | 30 days from month end | Rule 30(2C), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
Two limbs, added, on the same tax
Deducting late and depositing late are separate failures with separate rates. Both run on the tax itself, and they are added rather than compounded: 1% a month from the day the tax became deductible until it was deducted, then 1.5% a month from deduction until payment.
- Tax becomes deductible on credit or payment, whichever is earlier — not on the invoice date and not on the payment date alone.
- Tax deducted in March is deposited by 30 April, not 7 April. Getting that row wrong turns a compliant deposit into three weeks of interest that was never owed.
- Interest under this section is not a penalty and cannot be waived on reasonable cause. It is the price of the delay.
One reading this page has had to choose
Where tax was deducted late but then deposited by the due date for that later deduction, does the 1.5% limb run? Section 201(1A)(ii) is worded from the date of deduction to the date of payment and mentions no due date — but it is charged on a failure to pay, and a timely deposit is not one.
This page assumes the 1.5% limb does not run in that case, and charges only the 1% for the late deduction. The two readings differ by thousands of rupees on the same facts. It is on the sign-off sheet with our CA and is stated here rather than buried, because a calculator cannot show both.
Rates and thresholds as at 10 September 2026. This page is an estimate, not professional advice, and it is not a filing.
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