What is the TDS Interest Calculator?
This calculator is designed for India under the Income Tax Act. When Tax Deducted at Source (TDS) is deducted or deposited late, interest becomes payable. The standard rates are 1% per month for late deduction and 1.5% per month for late payment/deposit of TDS. This tool lets you enter the TDS amount, the applicable monthly rate, and the number of months delayed to instantly see the interest and total payable.
How to Use It
Enter the TDS amount in rupees, choose the monthly interest rate (commonly 1% or 1.5%), and the number of months of delay. Note that under Indian tax rules, even part of a month is counted as a full month. The calculator returns the interest and the total amount (TDS plus interest) you need to deposit.
The Formula Explained
The interest is simple (non-compounding) and calculated month-wise:
$$\text{Interest} = \text{TDS Amount} \times \frac{\text{rate}}{100} \times \text{number of months}$$
Here the rate is expressed as a percentage per month. For example, a 1.5% monthly rate over 3 months effectively applies 4.5% of the TDS amount as interest.
Worked Example
Suppose TDS of ₹10,000 was deposited 3 months late at 1.5% per month. $$\text{Interest} = 10{,}000 \times \frac{1.5}{100} \times 3 = 10{,}000 \times 0.015 \times 3 = ₹450$$ The total payable becomes \(₹10{,}000 + ₹450 = ₹10{,}450\).
FAQ
What rate should I use? Use 1% per month for delay in deducting TDS, and 1.5% per month for delay in depositing deducted TDS.
Is a partial month counted as full? Yes. Under Section 201(1A), any part of a month is treated as a complete month, so round up your delay.
Does interest compound? No. TDS interest is simple interest computed on the original TDS amount for each month of delay.
