Interest on Late TDS (234B/C) Calculator

When this applies

• You deducted TDS late and need the interest to pay.
• You deducted on time but paid the TDS late and need the interest.
• You are reconciling the interest the department has raised.
• You are estimating the cost of a delay before you file the correction statement.

Interest on INR 50,000 of TDS paid 3 months late at 12% a year

1. 1TDS amount: INR 50,000. Annual rate: 12% (that is 1% a month). Months late: 3.
2. 2Interest = 50,000 x 12 / 100 x 3 / 12.
3. 350,000 x 0.12 = INR 6,000 a year.
4. 46,000 x 3 / 12 = INR 1,500.
5. 5Total due = 50,000 + 1,500 = INR 51,500.

Interest of INR 1,500, making the total INR 51,500.

What this calculator does

Work out monthly interest on an amount deducted at source that was paid late, and the total now due. Enter the TDS, the annual rate and the months of delay, and it returns the interest and the total.

How this is calculated

Interest on late deduction or late payment of TDS is charged at a monthly rate, so the calculation is amount x annual rate / 100 x months / 12. For TDS, the rate is set by the Act: commonly 1% per month where tax was not deducted when it should have been, and 1.5% per month where it was deducted but paid late. Interest runs for the months or part-months of delay, which is why a part month is charged as a full month.

The formula

Interest = TDS × rate/100 × months/12

Common mistakes to avoid

• Using a part month as a fraction

  Interest is charged per month or part of a month. Counting 10 days as a third of a month understates it; it is one month.

• Charging interest on the gross payment

  Interest follows the tax, not the invoice. Charging it on the gross amount overstates it.

• Using 1% where 1.5% applies

  The rate is higher where tax was deducted but paid late. Using the non-deduction rate there understates the interest.

Frequently asked

What rate is charged on late TDS?

Commonly 1% per month where tax was not deducted when it should have been, and 1.5% per month where it was deducted but not paid on time. Set the rate that matches the failure.

How is the number of months counted?

Per month or part of a month. A delay of a few days into a new month is charged as a full month, so the number of months is rounded up.

Is interest charged on the TDS or on the payment?

On the tax that should have been deducted, not on the gross payment. The interest follows the tax, not the invoice.

Is the late fee the same as this interest?

No. This is interest on the tax. A separate late fee can apply for a late quarterly TDS statement, and the two are charged independently.

Can the interest be waived?

The Act provides limited circumstances in which interest may be reduced, but they are narrow. Treat the interest as payable unless a specific relief applies to your case.