TDS Interest & Late Fee
Compute interest on late deduction (1%) and late deposit (1.5%) under Section 201(1A), plus the ₹200/day late-filing fee under Section 234E — live.
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Interest & late-fee breakdown
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Disclaimer: Indicative estimate for TDS defaults under the Income-tax Act. Interest counts each started month as a full month; the 234E fee is capped at the TDS amount. Confirm figures against your TRACES demand before paying.
Section 201(1A) — interest on TDS defaults
If TDS is deducted late or deposited late, the deductor pays interest under Section 201(1A). There are two separate rates: 1% per month for late deduction and 1.5% per month for late deposit. Crucially, a "month" is not a calendar 30 days — any part of a month counts as a full month, so a one-day delay into a new month adds a whole month's interest.
Section 234E — ₹200/day late-filing fee
Section 234E charges a late fee of ₹200 for every day the TDS/TCS return (Form 24Q, 26Q, 27Q, 27EQ) is filed after the due date. Unlike interest, this is a fee for the return itself — and it is capped at the total TDS amount of that return, so it can never exceed the tax deducted.
| Late deduction (deductible → deducted) | 1% / month |
| Late deposit (deducted → deposited) | 1.5% / month |
| Part of a month | Full month |
| Fee per day of delay | ₹200 |
| Maximum | TDS amount |
| Delay counted | Filing − due date |
TDS return due dates
TDS deducted in a month must generally be deposited by the 7th of the following month (TDS for March is deposited by 30 April). TDS returns are filed quarterly. Missing either deadline triggers 201(1A) interest and 234E fee respectively.
| April – February deductions | 7th of next month |
| March deductions | 30 April |
| Q1 (Apr – Jun) | 31 July |
| Q2 (Jul – Sep) | 31 October |
| Q3 (Oct – Dec) | 31 January |
| Q4 (Jan – Mar) | 31 May |
Worked example
Say TDS of ₹50,000 was deducted on time but deposited 2 months late, and the return was filed 10 days late:
Late-deposit interest — 201(1A)
1.5% × 2 months × ₹50,000 = ₹1,500. Each started month counts as a full month, so even a few days into the second month is charged as a full 1.5%.
Late-filing fee — 234E
₹200 × 10 days = ₹2,000. This is below the ₹50,000 TDS amount, so no cap applies. Total payable: ₹3,500.
Key terms explained
Late deduction (1%)
When TDS is not deducted at the time of credit or payment, interest at 1% per month runs from the date it was deductible to the date it was actually deducted.
Late deposit (1.5%)
Once deducted, TDS must be paid to the government by the due date. Delay attracts 1.5% per month from the month of deduction to the month of deposit.
Part-month rule
A "month" for 201(1A) means any part of a month. A delay of 1 day and 31 days can both be charged as one month — timing near month boundaries matters.
234E cap
The ₹200/day fee accumulates until the return is filed, but is limited to the TDS amount of that statement — it can equal, but never exceed, the tax deducted.
Questions people ask
Short answers on TDS Interest & Late Fee. Tap a question to open it.
01What interest applies for late TDS?
Section 201(1A) charges 1% per month from the date the tax was deductible to the date it is deducted, and 1.5% per month from the date of deduction to the date of payment. Part of a month counts as a full month.
02What is the late fee for a TDS return?
₹200 per day under section 234E from the due date until the return is filed, subject to a maximum of the amount of TDS in that return. It is a fee, not a penalty, and cannot be waived on reasonable cause.
03Is there a penalty beyond the late fee?
Yes. Section 271H allows a penalty of ₹10,000 to ₹1,00,000 where the return is not filed within a year of the due date, or contains incorrect particulars. It is not levied if the tax, interest and fee are paid and the return is filed within a year.
04What are the TDS return due dates?
31 July for the June quarter, 31 October for September, 31 January for December, and 31 May for the March quarter.
05Can interest under 201(1A) be avoided if the payee paid the tax?
The deductor is not treated as an assessee in default if the resident payee has filed their return, included the income and paid the tax, and a chartered accountant's certificate in Form 26A is furnished. Interest up to the date the payee filed still has to be paid.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.