Interest u/s 201(1a) of Income Tax Act, 1961

Interest us 201(1a) of Income Tax Act, 1961

 

Interest u/s 201(1a) of Income Tax Act, 1961

 

A person is vulnerable to pay hobby to diverse delays/defaults & one of all them is Interest u/s 201(1a) of Income Tax Act, 1961 for Delay in Payment of TDS/TCS.

In segment 201 of the Income-tax Act, for sub-segment (1A). The following sub-segment will be substituted with impact from the first day of July 2010, namely:—

“(1A) Without prejudice to the provisions of sub-segment (1). If this kind of character, major officer or employer as is mentioned in that sub-section does now no longer deduct the complete or any part of the tax or after deducting fails to pay the tax as required with the aid of using or below this Act, he or it will be liable to pay easy hobby

(ii) at one and one-1/2 of in keeping with cent. for each month or a part of a month on the quantity of such tax from the date on which such tax changed into deducted to the date on which such tax is absolutely paid, and such hobby will be paid earlier than furnishing the statement according with the provisions of sub-segment (3) of segment 200.”

Now after reading the wording of the Provision we are able to apprehend the subsequent points:

 

a) Section 201(1A)(i) is for Interest for Non-Deduction of TDS/TCS & it is going to be paid from the date on which tax changed into deductible to the date of real deduction.

b) Section 201(1A)(ii) is for Interest for Delay in the price of TDS/TCS & it is going to be paid from the date of Deduction of TDS/TCS until the date of the real price.

 

Frequently Asked Questions (FAQ’s) on Interest u/s 201(1a) of Income Tax Act, 1961

 

Q1 What does a monthly method for levy of Interest u/s 201(1a)?

  • The month could suggest a duration of 30 days.

 

Q2 What charge of hobby ought to be charged for the month wherein tax changed into absolutely deducted because each the sub-segment i.e. 201(1A)(i) & 201(1A)(ii) is blanketed on this month withinside the calculation of hobby?

  • This may be defined via an instance that is as follows:
  • If tax which changed to deducted in Apr’2020 is absolutely deducted in June’2020 and deposited in Aug 2020.