Budget 2010-11 Interest for delay in depositing TDS after its deduction

Under the existing provisions of section 201(1A) of the Act, a person is liable to pay simple interest at one percent for every month or part of month in case of failure to deduct tax or payment of tax after deduction.

It  is  proposed to  increase  the  rate  of interest  for  non-payment  of  tax  after  deduction  from  the  present one per cent to one and one-half per cent for every month or part of month.

This amendment is proposed to take effect from 1st July, 2010.