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TDS Interest Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Dominik Czernia, PhD and Jack Bowater
Based on research by
incometaxindia.gov.in;
Last updated: Jan 18, 2024


We created this online TDS interest calculator (TDS - Tax Deducted at Source) to help you estimate the interest charges in the following three scenarios:

  • Interest on late payment of TDS;
  • Interest on late deduction of TDS;
  • Interest on late filing of TDS return; and
  • We included all of them in this single tool.

Read further, and we will explain how to apply our TDS interest calculator and show you how to calculate TDS interest and penalty. For example, you can easily compute how much interest on a late payment of TDS you need to pay.

Moreover, we also present some TDS interest calculation examples in each case to give you a more practical insight into how to calculate interest on TDS amount.

If you would like to get familiar with the concept of interest, visit our compound interest calculator, where you can also learn the concept of compounding.

How to use the TDS interest calculator

First, you need to select what you would like to compute:

  1. Interest on late deduction of TDS

    There are only three pieces of information that you need to provide to make the tool work. To start with, you need to set the TDS tax amount, the date of transaction, and the actual date of TDS deduction. When all is set, you will immediately see the estimated interest on late deduction.

  2. TDS late payment interest calculator

    To compute interest on late payment, besides setting the TDS amount, you need to set the date when TDS is deducted. After choosing the payment date, you will immediately see the interest on the late payment of TDS.

  3. Interest on late filing of TDS return

    After setting the TDS tax amount, you need to select the quarter and the year the TDS return should be filed by. After, when you choose the actual date you filed the TDS, you will see the interest on late filing of the TDS return.

When is TDS deducted? TDS deadlines

The table below summarizes the main TDS deadlines, including the due date for TDS payment and the due date for filing the TDS return. Note, that the TDS need to be deducted on the same day as the transaction date.

Month of deduction

Quarter ending

Due of TDS payment

Due date of TDS filing

April

30th June

7th May

31st July 2021

May

7th June

June

7th July

July

30th September

7th August

31st October 2021

August

7th September

September

7th October

October

31st December

7th November

31st Jan 2022

November

7th December

December

7th Jan

January

31st March

7th Feb

31st May 2022

February

7th March

March

7th April (for govt. deductors)

30th April (for other deductors)

How to calculate TDS interest — TDS interest calculation examples

The best way to demonstrate how to calculate interest on TDS amount is to show you examples in each case:

  1. How to calculate TDS interest on late deduction

    Let's say you missed the TDS deduction of Rs 10,000 on the date of the transaction, which was on 15th April 2021, and eventually, you deducted the TDS on 2nd May. Since the TDS deduction should occur on the same day as the transaction date, you need to pay interest, which is a 1% rate applied for two months (April and May).

    TDS interest on late payment = 10,000 × 0.01 × 2 = Rs 200

  2. How to calculate interest on late payment of TDS

    Say you missed the deadline of the TDS payment on 7th May 2021 (i.e., TDS deduction in April), and you deposited it on 12th May 2021 instead. In this case, you need to pay interest (1.5% rate) for May and the month when the TDS was deducted.

    TDS interest on late payment = 10,000 × 0.015 × 2 = Rs 300

  3. How to calculate interest on late filing of TDS return

    Let's assume your TDS return should be filed on 31st January 2021 (i.e., the 3rd quarter of return filing) with a TDS amount of Rs. 10,000, but you actually filed it on 15th March 2022. The fee on late TDS filing will be applied each day, that is, Rs. 200 on 43 days.

    Fee on late TDS filing = 43 × 200 = Rs 8,600

    Note that if the computed late filing fee exceeds the TDS amount, the applicable fee will be the amount of TDS (in the present case, Rs. 10,000).

FAQ

How do I calculate interest on late deduction of TDS?

According to section 201A, you will have to pay interest of 1% per month or part of the month from the date TDS is deductible (the day of transaction) to the date on which TDS is deducted.

How do I calculate interest on late payment of TDS?

The base of the computation of late payment interest is a rate of 1.5% per month from the date TDS was deducted to the actual date of deposit, applied as whole months (i.e., the part of a month is considered a full month).

If you make a late payment (deposit) of TDS after deduction, referring to section 201(1A), you have to pay interest.

How do I calculate interest on late filing of TDS return?

According to Section 234E, you must pay a fee of Rs 200 (two hundred) each day after passing the due date until your return is filed.

The total amount of fee, however, can't exceed the amount you are supposed to pay as TDS.

What is the interest on late payment of ₹ 10,000 TDS deducted on the 12th of October but paid on the 12th of December?

The interest on late payment of a ₹ 10,000 TDS deducted on the 12th of October but paid on the 12th of December is ₹ 450. It needs to be paid before the TDS return can be filed.

You can calculate it in the following way:

  1. Check the deadline for the TDS payment — The deadline for TDS payment is the 7th of the following month.

  2. Determine the months for late payment interest — The interest needs to be paid for 3 months: October, November, and December.

  3. Calculate the interest for a month with 1.5% rate:

    10,000 × 0.015 = ₹ 150

  4. Multiply the monthly interest by the number of relevant months:

    150 × 3 = ₹ 450

Disclaimer

You should consider the TDS interest calculator as a model for financial approximation. Accordingly, we created the calculator for instructional purposes only.

Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.

Tibor Pál, PhD candidate
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The amount of fee can't exceed the tax amount - the fee on late filing is ₹ 10,000.
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