Provision of adjustment - tds liability, Income Tax

[shatrughan sinha]

Dear Sir Suppose we have Tds liability of Rs 100 & Interest thereon is Rs 20 & We have paid Rs 115 for that. Now my question is whether Rs 115 paid will be first adjusted towards Interest of Rs 20 & balance Rs 95 will be adjusted against principal amount or vice versa. Kindly clarify,giving the provision of Tds law. Regards Shatrughan (RLE India Pvt Ltd)

Posts / Replies

[Dinesh Gupta]

As per the provisions of Income Tax and TDS, interest is a simple interest. Therefore, you need to adjust the amount of TDS first out of Rs. 115 and interest thereafter with the remaining amount. The balance amount of interest should be deposited as Interest.