TDS on Interest on late payment
TDS on Interest on late payment, No, Tax Deducted at Source is not applicable on interest due to late payments made to creditors.
Tax Deducted at Source is specifically applicable to certain types of payments such as salaries, rent, professional fees, etc., as outlined in the Income Tax Act.
Late paymenst interest or penalties do not fall into these categories, and therefore, TDS is not deductible on such payments.
However, it’s important to understand that the interest or penalty incur due to late payments is consider an expense and is eligible for deduction under the Income Tax Act, subject to certain conditions.
As a result, the payer can claim these expenses as deductions when calculating their taxable income
To visit https://www.incometax.gov.in
