Late Fee and InterestInterest on ₹25,000 of late TDS
For ₹25,000 of tax, section 398(3)(a) of the Income-tax Act, 2025 charges ₹375 a month if it was deducted but not paid on time, and ₹250 a month if it was not deducted when it should have been.
By months of delay
| Months | If deducted late (1%) | If paid late (1.5%) |
|---|---|---|
| 1 | ₹250 | ₹375 |
| 2 | ₹500 | ₹750 |
| 3 | ₹750 | ₹1,125 |
| 4 | ₹1,000 | ₹1,500 |
| 6 | ₹1,500 | ₹2,250 |
| 9 | ₹2,250 | ₹3,375 |
| 12 | ₹3,000 | ₹4,500 |
What this tells you
- A part of a month counts as a month, so one day of delay across a month end can mean two months of interest if the period starts near the end of a month.
- If tax was deducted late and then paid late, both periods apply, one after the other.
- The interest must be paid before the TDS statement is furnished, and a late statement costs ₹200 a day on top, up to the amount of the tax.
Common questions
What is the interest if ₹25,000 of TDS is paid late?
₹375 a month (1.5%) from the date it was deducted to the date it is paid; if it was also deducted late, 1% a month (₹250) for that period.
Sources
- The Income-tax Act, 2025 (Act No. 30 of 2025), as published in the Gazette of India, Extraordinary (egazette.gov.in), read from the PDF on 13 November 2026. Sections used: 263(1)(c) (due dates), 398(3)(a) (late TDS and TCS interest), 423 (late return interest), 424 (advance tax default), 425 (advance tax deferment), 426 (excess refund), 427 (late statement fee), 428 (late return fee).
- Commencement and the repeal of the 1961 Act: section 1(3) (in force on 1 April 2026) and section 536 of the same Act, and the CBDT's "FAQs on Interplay and Transition to the Income-tax Act, 2025" (incometaxindia.gov.in), questions 1.12, 3.5 and 6.1, read on 13 November 2026.
- Counting months: sections 398(3)(a) and 424 say "every month or part of a month", and the CBDT's FAQs (Q on interest for defaults in deducting or depositing TDS and for advance tax, read 13 November 2026) say "per month or part thereof". The Act itself leaves "the rounding off of periods when a fraction of a month is involved" to the rules it empowers the Government to make (the list of rule-making powers, clause (u)); those Income-tax Rules were not read. This site therefore counts every started month, measured from the starting date (28 June to 2 July is one month; 10 January to 12 February is two), which matches "month or part thereof" but the rules may fix the starting-date convention differently. Section 423 itself says only "number of months comprised in the period", so its calculator also shows the whole-month count.
Rates and fees read on 13 November 2026 from the Income-tax Act, 2025 as published in the Gazette. Rules can be amended, and the portal or your assessing officer computes the final amount. This site does the arithmetic and is not tax advice; it is not connected with the Income Tax Department.