The main purpose of a TDS challan is to deposit TDS with the government. Taxpayers may deposit the taxes levied under the various provisions of the Income Tax Act using this single challan. This article highlights the importance of the TDS challan.
What Is TDS Challan?
Tax Deducted at Source Challan is used to deposit Tax Deducted at Source with the government. Several parts of the Income Tax Act permit the use of a single challan. The due date for depositing Tax Deducted at Source shall be the same day on which TDS was collected if the government or the assessee agrees to pay TDS without using a challan.
The Income Tax Act of 1961 specifies the principles governing how tax deducted at source is to be assessed and computed in India. Every person required to withhold Tax Deducted at Source must also deposit the required Tax Deducted at Source sum with the Income Tax Department.
The Central Government makes sure that Form 26 AS(Annual Statement) deductees who have had their income taxed at source are qualified to get a refund or credit for the amount deducted. In essence, this form covers all the data regarding yearly Tax Deducted at Source and refunds. Deductees can use this information to file their Tax Deducted at Source Return and recoup the tax that was withheld from their income.
TDS Challan for Salaried Individuals
The employer will give the employee a Tax Deducted at Source certificate for the tax withheld from the employee’s salary. The TDS certificate (Form 16), which is generated after submitting the TDS return and is available for download via the TRACES software, follows in a specific format.
Why Is TDS Challan Needed?
Tax Deducted at Source challan is a documentary form issued by the Income Tax department. It needs to be filled and submitted to deposit the Tax Deducted at Source amount deducted on behalf of the Income Tax Department. Tax Deducted at Source Challan was launched in 2004.
The motto for introducing the TDS challan was to reduce the chance of human error, assist and simplify the process of online transactions related to tax deposition and tax collection, and make the Tax Deducted at Source refund process faster and hassle-free. It is very easy to track the TDS challan status. Thus, now the filing and following-up process has become much more efficient and transparent.
Discover how to calculate TDS on salary using our easy TDS calculator and get your TDS calculation formula correct.
Types of Challan for TDS
There are mainly three Tax Deducted at Source challan – TDS Challan 280, TDS Challan 281, and 282. One needs to understand the difference between these three types of Tax Deducted at Source challan, which offer different utilities and serve three different purposes.
- TDS Challan 280 – This form is used essentially to deposit income tax
- TDS 281 Challan – This form is used essentially for Tax Deducted at Source and TCS
- TDS Challan 282 –This form is used to deposit wealth tax/gift tax/ security or transaction tax and similar miscellaneous taxes.
Apart from these, three additional Tax Deducted at Source challan was also introduced.
- TDS 283 Challan – This form is used for the payments for Banking Cash Transaction Tax and Fringe Benefits Tax.
- TDS 286 Challan – This form is used for the payments requiring the declaration of income.
- TDS 287 Challan – This form contains payments under Pradhan Mantri Garib Kalyan Yojana payments.
Things to Know Before Collecting Tax Deducted at Source Challan
The Tax Deduction and Collection Account Number is given to the individuals in charge of collecting taxes via Tax Deducted at Source (TAN). The NSDL website – https://nsdl.co.in/lists this 10-digit alphanumeric number. The applicant must submit Form No. 49 B and a particular fee in order to obtain this number.
If the assessee is required to deduct Tax Deducted at Source and does not include TAN in all discussions with the Income Tax Department regarding Tax Deducted at Source, they risk the punishment of Rs. 10,000.
Important Dates to Remember for Depositing Tax Deducted at Source 281 Challan
- TDS Challan for payments that do not include property purchase –7th of every following month
- TDS Challan in case of property purchase –30th of every following month
- TDS Payment Challan 281 is issued between March –30 April.
If there is a delay in Tax Deducted at Source payment challan 281, a 1.5% per month interest rate is charged.
Tax Deducted at Source Deduction on Salary
Every month, a percentage of your pay is withheld by your employer, who then pays the withheld amount to the Income Tax Department on your behalf. Your employer decides how much Tax Deducted at Source needs to be withheld from your pay each month based on your annual salary total and your purchases of tax-saving products.
Tax Deducted at Source makes up a sizable amount of an employee’s income tax payment if they are salaried. When it’s usually around June or July, your employer will provide you a TDS certificate called Form 16 that details how much tax was withheld each month.
How to Make a Correct Tax Deducted at Source Challan Payment?
- To undertake the correct Tax Deducted at Source challan payment, you must correctly compute your total earnings during that financial year. You must remember to include your bonus, commission, and other additional payments or rewards
- You need to provide proof of investment at the end of each year to your employer
- Your employer will compute Tax Deducted at Source based on your income slabs. For that, he will take into consideration your net taxable income
- You should always deposit your Tax Deducted at Source collection with the central government within the specified time to prevent paying penalties.
TDS Challan 281 Online Compliance
TDS Challan ITNS 281 is issued when taxpayers deposit TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) and must comply with the timelines specified for depositing tax. Taxpayers can pay TDS online using e-payment tax or through authorized banks.
Understanding TDS Challan 281 online compliance is essential for taxpayers who need to deposit TDS and TCS. To know more, get in touch with our experts right away!
Types of Single Copy TDS Challan
There are three types of single-copy Challan: ITNS 281, ITNS 280 and ITNS 282.
- ITNS 282 is used for estate duty, expenditure tax, gift tax, and other miscellaneous taxes
- ITNS 281 is used for depositing TDS and TCS
- ITNS 280 is used for the payment of income tax, wealth, and corporate tax
FAQs:
1. Can a person claim a deduction on HRA for TDS Challan?
No, a person cannot claim a deduction on HRA (House Rent Allowance) for TDS Challan. HRA is a component of salary that is eligible for tax deduction under certain conditions.
2. What should a person do to exempt TDS Challan for a year?
To exempt TDS Challan for a year, a person can submit Form 15G or 15H to the payer. These forms are used to declare that the person's income is below the taxable limit and that no TDS should be deducted.
3. How does a salaried individual know about their TDS Challan details?
A salaried individual can know about their TDS Challan details by checking their Form 26AS. Form 26AS is a consolidated statement that shows the details of TDS deducted from income and deposited with the government
Conclusion
Tax Deducted at Source challans have simplified the processes for both the Income Tax Department’s fund maintenance and taxpayers’ income tax payments. The Tax Deducted at Source challan creation process is now easier to do online thanks to technological advancements. The most crucial Tax Deducted at Source challans are 280, 281, and 282.
Challans 280 and 281 are used for payments of Tax Deducted at Source and TCS, while challans 282 are used for payments of other taxes, such as gift tax and estate tax. Therefore, it’s crucial to comprehend the many challan forms and make the greatest use of the internet system to carry out the required transactions – https://incometaxindia.gov.in/Pages/Deposit_TDS_TCS.aspx
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