TDS Interest Calculator
Work out the interest on TDS or TCS that was deducted late or deposited late: 1% a month for late deduction and 1.5% a month for late deposit, counted the way TRACES counts it. Runs in your browser; nothing is uploaded.
Add one block for each deduction. The deposit due date is worked out for you from the type and the date of deduction, and you can replace it with your own.
| # | Late deduction | Interest | Deposit due | Late deposit | Interest | Total |
|---|
A worked example
Say ₹10,000 of TDS was deducted on 10 June 2026 and deposited on 8 August 2026. The deposit was due by 7 July, so it was late, and interest runs from the date of deduction. Counting from 11 June to 8 August touches three calendar months, June, July and August, so the interest is ₹10,000 × 1.5% × 3 = ₹450. Suppose the tax had also been due for deduction on 3 May 2026 but was only deducted on 10 June. Late deduction then adds ₹10,000 × 1% × 2 months (May and June) = ₹200, making ₹650 in all.
Understanding the calculation
- Late deduction
- If the tax is deducted after the date it was due to be deducted, which is the date of payment or credit to the payee, interest is 1% a month on the tax for the delay.
- Late deposit
- If the tax is deposited after the due date, interest is 1.5% a month on the tax, counted from the date it was deducted and not from the due date. A deposit on or before the due date carries no interest at all.
- How months are counted
- Every calendar month, or part of one, counts as a full month, starting the day after the date the delay began. Deducted on 10 June and deposited on 8 August is three months: June, July and August. If the tax was deducted on the last day of a month, that month is not counted.
- What it ignores
- The late filing fee and any penalty for the statement, interest where the payee has already paid the tax, deductors who are government offices, and any waiver granted by the tax authorities.
Common questions
How is interest on late TDS worked out?
There are two parts, both simple interest on the tax. Late deduction is 1% for every month or part of a month from the date the tax was due to be deducted to the date it was actually deducted. Late deposit is 1.5% for every month or part of a month from the date of deduction to the date of deposit. Section 201(1A) of the Income-tax Act, 1961 sets these, and Section 398(3) of the Income-tax Act, 2025 carries the same rates.
How are the months counted?
Every calendar month, or part of one, counts as a full month, counting from the day after the date the delay began. TRACES gives the example of tax deducted on 10 June 2023 and deposited on 8 August 2023, which is three months (June, July and August), so interest on ₹10,000 is ₹450. If the tax was deducted on the last day of a month, that month is not counted.
Is there interest if I deposit on time?
No. Late deposit interest applies only when the deposit comes after the due date. The due date is the 7th of the next month for most TDS, 30 April for tax deducted in March, and 30 days after the end of the month for TDS on property (Section 194-IA), rent (194-IB), certain payments by individuals (194M) and virtual digital assets (194S).
Why does one day's delay cost so much?
Because once the deposit misses its due date, interest runs from the date of deduction, not from the due date. A deposit one day late can therefore cost a full month or more of interest at 1.5%, while a deposit on the due date costs nothing.
Does the same interest apply to TCS?
Yes. From 1 April 2025 the Income Tax Department shows TCS interest at the same two rates, 1% a month from the date the tax was collectible to the date it was collected and 1.5% a month from collection to deposit. TCS is deposited by the 7th of the next month.
When and how is the interest paid?
It has to be paid before the TDS or TCS statement is filed, as Section 201(1A) and Section 398(3)(b) require. If you have received a default notice, follow the payment steps TRACES shows for your case.
What if the payee has already paid tax on the income?
Then you are not treated as in default for the tax you failed to deduct, but interest at 1% still runs from the date the tax was due to be deducted until the payee filed their return. Enter the payee's return filing date as the date it was deducted to see that figure.
What does this calculator leave out?
The late filing fee and any penalty for the statement, deductors who are government offices, and any waiver the tax authorities grant. It works only from the dates and amounts you enter, so check the interest against your TRACES default summary.