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For Chartered AccountantsRates reviewed September 2026

TDS Interest and Late Fee Calculator: 201(1A), 234E

This TDS interest calculator covers the three charges that follow a TDS default: interest for late deduction or late deposit, the fee for filing the quarterly statement late, and the penalty for not filing it at all. Under the Income-tax Act, 2025 these sit in section 398 (earlier section 201(1A)), section 427 (earlier section 234E) and section 461 (earlier section 271H). The rates and limits carried over unchanged from the 1961 Act, only the numbering moved.

Interest runs at two different rates. Where tax was not deducted at all, section 398(3)(a)(i) charges 1% for every month or part of a month from the date the tax was deductible to the date it is actually deducted. Where tax was deducted but not paid over, section 398(3)(a)(ii) charges 1.5% for every month or part of a month from the date of deduction to the date of payment. Part of a month counts as a full month, so a deduction made on 31 May and paid on 1 August attracts four months of interest, not two.

The fee under section 427 is ₹200 for every day the quarterly statement is late, capped at the amount of tax deductible or collectible in that statement, and it must be paid before the statement is filed. Penalty under section 461 ranges from ₹10,000 to ₹1,00,000 and is over and above the fee, but it is not levied where the tax, the fee and the interest have been paid and the statement is filed within one month of the due date.

TDS Interest Calculator

Interest runs on the tax, not on the gross payment.

₹

For a late deposit the clock starts on the date of deduction, not on the 7th of the next month.

Interest and late fee payable

₹16,200

₹6,000 interest plus ₹10,200 late filing fee

TDS amount
₹1,00,000
Rate under section 398, earlier 201(1A)Tax deducted but not paid, section 398(3)(a)(ii)
1.5% a month
Challan due dateDeducted on 10 Jun 2026, deposited on 20 Sept 2026
7 Jul 2026
Months or part months chargedCalendar months touched, any part month counted in full
4 months
Interest under section 398₹1,00,000 x 1.5% x 4
₹6,000
Statement filed late byDue 31 Jul 2026, filed 20 Sept 2026
51 days
Late fee under section 427, earlier 234E51 days x ₹200
₹10,200
Total payable₹6,000 interest plus ₹10,200 fee
₹16,200
  • The statement was filed more than a month after 31 Jul 2026, so penalty under section 461, earlier 271H, of ₹10,000 to ₹1,00,000 is in addition to the fee.
  • The section 427 fee must be paid before the statement is delivered, or the return is not accepted.
  • Interest under section 398 is not deductible while computing business income.

The formula

Interest = TDS amount × Rate (1% or 1.5%) × Number of months or part months of delay

1% a month
Section 398(3)(a)(i), earlier 201(1A)(i). Runs from the date the tax was deductible to the date it is actually deducted.
1.5% a month
Section 398(3)(a)(ii), earlier 201(1A)(ii). Runs from the date of deduction to the date the tax is actually paid to the government.
Month or part of a month
Calendar months, not 30 day periods. Any fraction of a month is charged as a full month.
Late filing fee
₹200 for each day of delay in furnishing the quarterly statement under section 427, earlier 234E, capped at the tax deductible in that statement.

Interest under section 398 is not deductible while computing business income, and it must be paid before the statement is filed.

How to calculate it

  1. 1

    Identify the type of default

    Separate cases where tax was never deducted from cases where it was deducted and held back. The first attracts 1% a month, the second 1.5% a month, and a single challan can carry both if deduction itself was late.

  2. 2

    Fix the start and end dates

    For non-deduction, run from the date the tax was deductible to the date of actual deduction. For non-payment, run from the date of deduction to the date of actual deposit, not from the 7th of the following month.

  3. 3

    Count months, rounding up

    Count calendar months touched by the delay and treat any part month as a whole month. Deduction on 10 June paid on 20 September is June, July, August and September, which is four months.

  4. 4

    Apply the rate to the tax amount

    Multiply the TDS amount by the rate and the month count. Interest is computed on the tax, not on the gross payment, and it is charged per deduction rather than on the quarter as a whole.

  5. 5

    Add the late filing fee

    Count days from the statement due date to the date of filing and multiply by ₹200. Cap the total at the amount of tax deductible in that statement, and pay it before filing so the return is accepted.

  6. 6

    Check whether penalty is avoidable

    Penalty under section 461 is not levied where the tax, interest and fee are paid and the statement is filed within one month of the due date. Beyond that window the exposure is ₹10,000 to ₹1,00,000 on top of the fee.

TDS interest, fee, penalty and due dates for FY 2026-27

TDS interest, fee, penalty and due dates for FY 2026-27
ItemSection (2025 Act / 1961 Act)Charge or dateNotes
Tax not deducted398(3)(a)(i) / 201(1A)(i)1% for every month or part of a monthFrom the date deductible to the date of deduction
Tax deducted but not paid398(3)(a)(ii) / 201(1A)(ii)1.5% for every month or part of a monthFrom the date of deduction to the date of payment
Late filing of the quarterly statement427 / 234E₹200 for every day of delayCannot exceed the tax deductible in that statement
Failure to file or incorrect particulars461 / 271H₹10,000 to ₹1,00,000Not levied if tax, interest and fee are paid and the statement is filed within one month of the due date
Challan for April to February deductionsPayment due date7th of the following monthApplies to each month of deduction
Challan for March deductionsPayment due date30 April 2027Only the March month gets the extended date
Statement for Q1, April to June 2026Return due date31 July 2026Form 138 for salary, Form 140 for other payments
Statement for Q2, July to September 2026Return due date31 October 2026Form 138 for salary, Form 140 for other payments
Statement for Q3, October to December 2026Return due date31 January 2027Form 138 for salary, Form 140 for other payments
Statement for Q4, January to March 2027Return due date31 May 2027Form 138 for salary, Form 140 for other payments

Worked example

TDS deducted
₹1,00,000
Date of deduction
10 June 2026
Due date for the challan
7 July 2026
Date actually deposited
20 September 2026
Q1 statement due date
31 July 2026
Q1 statement actually filed
20 September 2026
  • Months from deduction to deposit: June, July, August, September = 4 months
  • Interest = ₹1,00,000 × 1.5% × 4 = ₹6,000
  • Days late in filing = 31 July 2026 to 20 September 2026 = 51 days
  • Fee = 51 × ₹200 = ₹10,200, which is within the ₹1,00,000 cap

Interest ₹6,000 plus late filing fee ₹10,200, a total of ₹16,200.

Frequently asked questions

Where tax was deducted but not deposited, interest runs at 1.5% for every month or part of a month from the date of deduction to the date it is actually paid. Where tax was not deducted at all, the rate is 1% for every month or part of a month until it is deducted. Both sit in section 398 of the Income-tax Act, 2025, which replaced section 201(1A).
Yes. The statute charges interest for every month or part of a month, and the computation runs on calendar months rather than 30 day blocks. A one day overrun into a new calendar month adds a full month of interest, which is why a deduction made late in a month and cleared early in the next carries two months of interest.
From the date the tax was actually deducted, not from the 7th of the following month. This is the most common error in self-computation, because it understates the delay by up to a month. The clock stops on the date the challan is paid, not the date the statement is filed.
Section 427 of the Income-tax Act, 2025, earlier section 234E, charges ₹200 for every day a quarterly TDS or TCS statement remains unfiled after its due date. The fee is a levy rather than a penalty, so there is no discretion to waive it. It must be paid before the statement is delivered.
No. The fee is capped at the amount of tax deductible or collectible reported in that statement. A quarter with ₹40,000 of TDS cannot attract more than ₹40,000 of fee however long the delay runs. The cap applies statement by statement, not across the year.
Penalty under section 461, earlier section 271H, is not levied where the tax deducted has been paid to the government along with any fee and interest, and the statement is filed within one month of its due date. Outside that window the penalty ranges from ₹10,000 to ₹1,00,000 and is in addition to the section 427 fee.
31 July 2026 for the April to June quarter, 31 October 2026 for July to September, 31 January 2027 for October to December, and 31 May 2027 for January to March. From FY 2026-27 the statements are furnished on Form 138 for salary, which replaced Form 24Q, and Form 140 for other payments, which replaced Form 26Q.

Sources

Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it.

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