1. What is TDS Interest?

TDS (Tax Deducted at Source) interest is the penalty charged for late deposit of tax deducted at source to the government. The current interest rate is 1.5% per month or part of a month for late payment.

2. How Does the Calculator Work?

The calculator uses the TDS interest formula:

Where:

• \( TDS \) — Tax Deducted at Source amount
• \( 1.5\% \) — Monthly interest rate
• \( months \) — Number of months late (rounded up)

Explanation: The interest is calculated as simple interest at 1.5% per month on the TDS amount for the number of months delayed.

3. Importance of TDS Interest Calculation

Details: Accurate TDS interest calculation is crucial for compliance with tax laws, avoiding penalties, and proper financial planning for businesses and individuals who deduct TDS.

4. Using the Calculator

Tips: Enter the TDS amount in your local currency and the number of months delayed (round up partial months). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is the interest rate always 1.5%?
A: Currently yes, but tax laws may change, so always verify the current rate with your local tax authority.

Q2: How are partial months calculated?
A: Any part of a month is considered as a full month for interest calculation purposes.

Q3: Can this interest be waived?
A: In exceptional cases with valid reasons, you may apply for a waiver, but approval is at the discretion of tax authorities.

Q4: Is this calculator applicable for all countries?
A: This uses the standard 1.5% rate common in many countries, but verify your local tax laws as rates may vary.

Q5: When does the interest calculation period start?
A: Typically from the 7th of the month following the month in which TDS was deducted to the actual payment date.