What is the interest for not deducting TDS on time?

Interest is 1% per month or part of a month, from the date tax was deductible to the date it was actually deducted.

Is part of a month counted as a full month?

Yes. Even a delay of one day in a month counts as a full month. TRACES counts months on a calendar basis.

Can TDS interest be waived?

No. Interest is compensatory and cannot be waived. Pay it with the TDS before filing the return to avoid a default notice.

Income Tax · Updated for tax year 2026-27

TDS Late Payment Interest Calculator

Interest on TDS under Section 398(3)(a) (old sec. 201(1A)) is 1% a month from the date tax was deductible to the date it was deducted, and 1.5% a month from the date of deduction to the date of deposit if the deposit misses its due date. Part of a month counts as a full month. Enter the dates to see both amounts.

Enter your details

Values you enterComputed values

TDS amount

Date TDS was deductible

Date of payment or credit, whichever is earlier

Date TDS was deducted

Date TDS was deposited

Result

Deposit due date7 Jun 2026

Late deduction @ 1% × 2 month(s)₹200

Late deposit @ 1.5% × 3 month(s)₹450

Total interest₹650

Disclaimer: Computed to the best of our knowledge, as per the law — including the section changes under the Income-tax Act, 2025 — in force on the date this website was last deployed (28 Sep 2026). Results are estimates for guidance only and are not tax, legal or investment advice. Please verify with the Act, rules and notifications, or a qualified professional, before relying on them. Rates and limits last reviewed on 28 Sep 2026.

How to use the TDS Late Payment Interest Calculator

1
Enter the TDS amount.
2
Enter the date TDS should have been deducted — the date of payment or credit to the payee, whichever is earlier.
3
Enter the date you actually deducted it and the date you deposited (or will deposit) it.
4
The calculator shows the deposit due date, the months counted and the interest for each delay.

TDS interest formula

Late deduction: TDS × 1% × months from date deductible to date deducted

Late deposit: TDS × 1.5% × months from date deducted to date deposited

Deposit due date: 7th of the next month (30 April for tax deducted in March)

Months are counted by calendar month, and part of a month is a full month

Late-deposit interest runs from the date of deduction, not from the due date — so paying one day late costs at least two months’ interest.

Worked example

TDS of ₹10,000 was deductible on 10 April 2026, deducted on 25 May 2026 and deposited on 8 July 2026.
Late deduction: April and May = 2 months × 1% × ₹10,000 = ₹200.
Deposit was due on 7 June. Late deposit: May, June and July = 3 months × 1.5% × ₹10,000 = ₹450.
Total interest payable: ₹650, to be paid before filing the TDS return.

Paying the interest

Pay the interest through the same challan as the TDS (under the "interest" head) before filing the quarterly TDS statement, and report it in the return. Unpaid interest shows up as a default in the TDS processing statement and is demanded later.

Interest on late TDS is not a deductible business expense.

Frequently asked questions

Interest is 1.5% per month or part of a month, from the date of deduction to the date of deposit, when the deposit is made after its due date.