Tax Deducted at Source, popularly known as TDS, is created to get tax directly from the revenue source. Let us learn more.
Introduction:
Tax Deducted at Source (TDS) is a mechanism through which the government collects taxes at the time of making specified payments, such as salary, interest, rent, etc. The TDS amount is deducted by the payer and remitted to the government on behalf of the payee. With the advancement of technology, the process of making TDS payments has become more convenient and efficient through online channels. In this guide, we will explore the various aspects of making TDS payments online, including due dates, applicability, advantages, consequences of delays, and frequently asked questions. When Should I Deposit the TDS Payment Online
TDS Online Payment – Who Is Eligible?
TDS must be withdrawn only if an individual’s net income or salary crosses the overall taxable threshold. No TDS is deducted when the amount is lower than the taxable threshold. The Income Tax Division of India has declared various limits for several income sources like wages, interest, professional salaries, etc. Therefore, if your revenue from FD interests happens to be lower than Rs.40,000, then Tax Deducted at Source is not applicable.
Here is a guide for making TDS Payments online:
Making TDS payments online has become easier and hassle-free. Follow these steps to make your TDS payment online:
- Step 1: Visit the official website of the Income Tax Department or the designated bank’s website for TDS payments.
- Step 2: Select the relevant challan for TDS payment, which is typically Challan 281 for non-salary TDS and Challan 280 for salary TDS.
- Step 3: Fill in the required details such as the Assessment Year, type of payment, TAN (Tax Deduction and Collection Account Number), and other relevant information.
- Step 4: Verify the details entered and proceed to make the payment using internet banking or any other designated online payment method.
- Step 5: After successful payment, you will receive a challan counterfoil or acknowledgment, which serves as proof of payment.
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When Must You Pay the TDS?
The due dates of TDS payments vary from government taxpayers to non-governmental registered taxpaying agents. In the table drawn below, you will find the respective deadlines.
| TDS online payment deadlines for government tax-payers | |
| For tax settlement without issuing an online challan | The declared day of deduction |
| Tax settlement using a challan | Next month’s 7th date |
| Taxes charged on perquisites charged by any employer | Next month’s 7th date |
| TDS online payment deadlines for non-government tax-payers | |
| Tax to be deducted in March | Next year’s April 30 |
| Tax deductible in January or any other month apart from March | Next month’s 7th date |
The Assessing Officer is allowed to grant the taxpayers the leverage of making TDS online payment quarterly. But you must remember that such decisions are never made in association with the agreement sanctioned by the Joint Commissioner. In the next table, you will discover the quarterly payment due dates:
| Quarter finishing on June 30 | July 7 |
| Quarter finishing on September 30 | October 7 |
| Quarter finishing on December 31 | January 7 |
| Quarter finishing on March 30 | April 30 |
The process to complete TDS online payment
The whole process of Paying the Tax online has been broken down into simplified steps:
- Visit the original website of the NSDL. Select the tab marked as ‘Services’. Click on ‘e-payment’. Select the next option: ‘Click for paying tax online’. All these steps are carried out on the homepage of NSDL’s official webpage.
- Choose ‘CHALLAN NUMBER/ ITNS 281’ after going through the list of specific challan displays offered on the website.
- Now, the internet browser directs you to another webpage where you are requested to enter suitable information in the specified blanks.
- You are taken to another website. This window asks you to enter the data regarding the TAN, tax application, the AY, your state and corresponding pin code. After this, continue to select the MOP or mode of payment and other related options. Once you have completed attending all the fields, you must verify the captcha code and click on the ‘Proceed’ button.
- The TAN – https://incometaxindia.gov.in/Pages/tan-tds.aspx gets approved when the application is finally uploaded. The taxpayer’s identification is verified, and a confirmation alert is displayed on the screen once the authorisation request is approved.
- Once the user confirms all the information, he is directed to the registered bank’s internet banking portal.
- Now, all you have to do is provide the online banking account details to start the transfer of funds.
- A TDS challan is generated and displayed on NSDL’s official website: https://nsdl.co.in/ after a completed transaction. A unique Corporate Identity number or CIN is attached to this challan, along with payment details and the bank’s name via which the TDS online payment was conducted. You have to download a copy of this e-challan for future needs.
Applicability of Online Payment:
All entities that are required to deduct TDS as per the Income Tax Act are eligible to make TDS payments online. This includes businesses, individuals, and government agencies.
How to Check the Status of Online TDS Payments:
After making a TDS payment online, you can check its status through the following methods:
- a) Visit the NSDL TIN website or the official Income Tax website and use the “Challan Status Inquiry” option to check the status by providing the required details.
- b) You can also view the status through your Internet banking account by accessing the “Tax” or “TDS” section.
Advantages of Online TDS Payment:
- Convenience: Online TDS payment eliminates the need to visit physical banks and enables payments from the comfort of your home or office.
- Instant Receipt: Online payments generate immediate acknowledgment, providing proof of payment.
- Timely Compliance: The online platform ensures timely payment of TDS, avoiding any penalties or interest for delayed payments.
- Efficient Record-Keeping: Online platforms maintain digital records of TDS payments, simplifying the process of tax filing and auditing.
Forms for Filing TDS Returns
- Form 24Q – A quarterly TDS statement showing the tax withheld from salary payments.
- Form 27Q – Quarterly TDS statement for tax withheld from payments made to non-residents (who are not companies) and overseas companies (other than salaries).
- Form 26Q – For other situations, such as TDS deducted on professional fees, interest payments, etc., a quarterly TDS statement is required.
Why is it considered a wise solution to pay your TDS online?
The advantages linked to an Online Corporate Tax activity are given below;
- Payments are carried out literally from anywhere. The authorised party needs all the necessary details and a device with an active internet connection; that’s it, he is good to go.
- The online payment gateway presents no time constraints; the payment should be done before the deadline, around the clock.
- No submission of a physical challan is asked for.
- A taxpayer can complete transactions on behalf of the firm, organisation and other professional institutions.
- Payment confirmation reaches the taxpayer instantly with proper supporting receipts or invoices.
- The Central Government India’s Income Tax department receives the e-challan instantly once the authorised taxpayer has made the transaction.
Due Date for TDS Online Payment:
The due date for TDS online payment varies depending on the type of payment and the deductor’s category:
- a) For government deductors, TDS must be paid on the same day of deduction.
- b) For non-government deductors:
TDS deducted in March: Due date is April 30th of the same year.
TDS deducted in any month other than March: Due date is the 7th day of the following month.
What Happens If You Delay in Payment of TDS?
Delay in TDS payment can lead to the following consequences:
- Interest: The deductor may be liable to pay interest on the amount of TDS not deposited within the due date. The interest rate is determined by the Income Tax Department.
- Penalty: In case of significant delays, the tax authorities may impose penalties on the deductor for non-compliance.
Disallowance of Expenses: If TDS is not deducted or deposited late, the expenses claimed by the deductor may be disallowed while calculating taxable income.
The penalty associated with late filing of TDS returns
The Income Tax Division of India has set certain penalties stipulating criteria upon failure to submit TDS statements/returns within the due date. Here we have briefly discussed the clauses:
- Failure to yield the TDS returns: Rs. 100 penalty is levied for each delayed day following the last date mentioned for the particular tax submission. This regulation is per Section 272A(2) of our Income Tax Act.
- Failing to file the returns within stipulated time: Rs. 200 penalties are levied for each delayed day following the last date mentioned for the tax returns filing. This regulation is per Section 234(E) of our Income Tax Act.
- For false data submission: As per Section 271H, a penalty of up to Rs. 1,00,000 can be charged if the taxpayer gives false information regarding challan details, PAN, TDS amount etc. The minimum penalty is not less than Rs. 10,000.
- For mistakes detected in TDS return filing: If any taxpayer makes mistakes filing TDS statements within the stipulated date, a monetary sanction ranging between Rs. 10,000 and Rs. 1,00,000 is set to be charged from his account as per Section 271H of our Income Tax Act.
Conclusion:
Making TDS payments online is a convenient and efficient way for deductors to fulfill their tax obligations. It not only ensures timely compliance with tax laws but also provides several advantages, such as instant receipts and efficient record-keeping. However, deductors must be vigilant about the due dates to avoid penalties and interest on delayed payments. By understanding the process of online TDS payment and being aware of the consequences of delays, taxpayers can ensure smooth and hassle-free TDS compliance.
Frequently Asked Questions:
1. Is TAN mandatory for making TDS payments online?
Yes, TAN (Tax Deduction and Collection Account Number) is mandatory for making TDS payments online. It is a unique 10-digit alphanumeric number issued by the Income Tax Department to all deductors.
2. What if I quoted the wrong TAN unintentionally while making TDS payment?
Quoting the wrong TAN can lead to misallocation of the payment. In such cases, the taxpayer should immediately contact the bank and the Income Tax Department to rectify the error.
3. Can I view the TDS-paid tax challans online?
Yes, taxpayers can view their TDS paid tax challans online through the NSDL TIN website or the official Income Tax website by using the Challan Status Inquiry option.
4. How can I create a Nil TDS challan?
A Nil TDS challan is used when no tax is deducted. The process to create a Nil TDS challan is similar to regular TDS challans, but the deduction amount should be entered as zero.
5. By when should I deposit the TDS payment online?
For government deductors, TDS must be deposited on the same day of deduction. For non-government deductors, the due date is the 7th day of the following month (except for TDS deducted in March, which has a due date of April 30th).
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