Section 201 1a

Section 201 of income tax act 1961 provides for consequences of failure to deduct or pay tds.

Section 201 1a. However interest is payable under section 201 1a in case the assessee is in default or not. Critical analysis of section 201 1a of income tax act ca mudit agarwal pgdfm mcp ifr on 26 december 2011 in section 201 of the income tax act for sub section 1a the following sub section shall be substituted with effect from the 1st day of july 2010 namely. The full section 201 is provided in this article.

Part of the month will be treated as a month. As per section 201 1a of the income tax act 1961 the act if any person including principal officer or company does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under the act then such person shall be liable to pay interest. It is provided that where interest is charged under sub section 1a of section 201 on the amount of tax specified in the intimation issued under sub section 1 of section 200a for any period then no interest shall be charged under section 220 2 on the same amount for the same period.

The governing section ie section 201 1a of the act is explicit that interest on late deposit of tds is to be calculated from the date of deduction to the date of deposit at the rate of 1 5 percent per month or part of the month. Section 201 1a in the income tax act 1995 1a 1 without prejudice to the provisions of sub section 1 if any such person principal officer or company as is referred to in that subsection does not deduct or after deducting fails to pay the tax as required by or under this act. Section 201 trade act of 1974 global safeguard investigations import relief for domestic industries under section 201 domestic industries seriously injured or threatened with serious injury by increased imports may petition the usitc for import relief.

Let us start with section 201 1a. The intention of low is not to collect 2 months interest for two part of the months. Traces is calculating interest u s 201 1a the act is clear that the interest should be calculated from the date on which tax was deducted to the date on which such tax is actually paid.

In this regard we find that the provisions of section 201 1a of the act are independent of section 201 1 of the act inasmuch as it starts with without prejudice to the provision of sub section 1 there is no choice available to the revenue and interest u s 201 1a of the act is to be mandatorily charged for the delayed period of remittance and is automatic in nature. Section 201 1 explains assessee in default who will be penalized in case of default under section 221 of the income tax act 1961.