The interest rate on default on TDS compliance has been amended by the Finance Act 2010, according to which an assessee is regarded to be in default on the following instances:
a) Does not deduct the tax at source (either wholly or partly) from payments on which tax is required to be deducted under the Act.
b) After deducting does not pay the same into the Government Treasury.
The Finance Act, 2010 has amended the said provisions and interest shall be levied as under:
• At one percent for every month or part of a month from the date on which such tax was deductible to the date on which such tax is deducted; and
• At one and one-half percent for every month or part of a month from the date on which such tax was deducted to the date on which such tax is actually paid.
The amended provisions are effective from 1st July, 2010.
