Last Updated on: April 10, 2026

TDS late payment interest rate calculator New Income Tax Act 2025

Under the transition to the Income Tax Act, 2025, the fundamental interest rates for late TDS payments remain consistent with the previous regime, though the statutory section numbering has been updated (now primarily governed under Section 393).

The following rates apply for the Financial Year 2025-26 (Assessment Year 2026-27):

1. Interest Rates for Delayed TDS

Interest is calculated as Simple Interest on a “per month or part of a month” basis.

 

Type of Default	Interest Rate	Calculation Period
Late Deduction	1% per month	From the date on which tax was deductible to the date of actual deduction.
Late Payment	1.5% per month	From the date of actual deduction to the date of payment to the government.

Note: “Part of a month” is treated as a full month. For example, a delay of even 1 day beyond a month results in an additional month’s interest.

 

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2. Late Filing Fee (Section 234E)

If you fail to file your quarterly TDS return (Statement) by the due date:

• Fee: ₹200 per day of delay.

• Limit: The total late fee cannot exceed the total amount of TDS deductible for that quarter.

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3. Example Calculation

Assume you deducted ₹10,000 as TDS on April 15, 2025. The due date to deposit this was May 7, 2025. If you deposited it on June 10, 2025:

 

1. Deduction Month: April

2. Payment Month: June

3. Months for Interest: April (part), May (full), June (part) = 3 Months.

4. Calculation: $₹10,000 \times 1.5\% \times 3 = ₹450$.

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4. Transition to Income Tax Act 2025

• Effective Date: The new Act applies to payments or credits occurring on or after April 1, 2026.

• Policy Continuity: While the section numbers have changed to a simplified tabular format, the interest rates (1% and 1.5%) and thresholds remain unchanged to ensure a smooth transition for taxpayers.

   

• Reporting: For transactions after April 1, 2026, ensure you use the new section codes (e.g., Section 393) in your returns to avoid system validation errors.

Are you calculating interest for a specific payment, or do you need the due date calendar for the upcoming quarters?

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