What is the rate of interest charged for delay in depositing TDS to the credit of the Government after deducting it?

Under Section 201(1A), penal interest is levied on deductors for compliance defaults. The law makes a clear distinction between two types of defaults: 1. Delay in Deduction: If tax is not deducted when it was due, interest is charged at 1% per month or part of a month from the date on which tax was deductible to the date of actual deduction. 2. Delay in Payment/Deposit: If tax has been deducted but not deposited with the government within the due date, a higher interest rate of 1.5% per month or part of a month applies from the date of actual deduction to the date of actual payment.