TDS

A Guide to Pay TDS Online and Offline

We start by giving an understanding of TDS payment. Then we mention that TDS can be paid online and offline. Post this. We mention the mistakes to avoid while making the payment. Followed by a complete procedure on how to do the same online and offline.

Your tax liabilities are perhaps the most vital aspect of financial planning. The tax chargeable is determined based on the outlines provided in the Income Tax Act, 1967, and may vary depending on your annual income. The Indian Government may collect taxes through direct means or indirect taxes such as TDS and more:

  • TDS (Tax Deducted at Source)
  • TCS (Tax Collected at Source)
  • Advance Tax
  • Self Assessment Tax
  • GST (Goods and Service Tax)
  • Tax on Regular Assessment

Therefore, tax deducted at source (TDS) is a method of collecting income tax from the very source of income. In other words, a person (deductor) who is liable to make a payment of specified nature to another person (deductee) will deduct tax at the source and remit the same into the account of the Central Government. Furthermore, the deductee whose income the tax is deducted from is entitled to a credit for the amount deducted. This is represented through the TDS certificate of Form 26AS issued by the deductor.

A Guide to Pay TDS Online and Offline: What is TAN, and Why Is It So Important?

Any assessee or deductor liable to deduct TDS needs to have a TAN to conduct depositions. Tax Deduction and Collection Account Number (TAN) is a ten-digit alphanumeric number that, as per section 203A of the Income Tax Act, needs to be mentioned in all related documents. These include returns, payments and any other communication with the income tax department. Failing to mention TAN can lead you to face heavy penalties. You can apply for TAN via form 49B on the Income Tax Department website.

A Guide to Pay TDS Online and Offline: Beginning your TDS Payment: Challan 281

Any individual or business must deposit to the Central Income Tax Department through ITNS 281. Also referred to as challan 281, this is a common challan to pay and TCS. You can also refer the challan to a bill receipt, invoice or an official summon.

To make tax payment more convenient and to reduce errors, the online version of collecting tax was introduced in 2004. So, you can pay TDS in two ways:

  1. TDS Offline: You can visit an authorised bank branch and submit the challan.
  2. TDS Online (e-TDS): You can conduct an online TDS payment through the official government website.

Oversights to avoid while making a TDS payment

Before we move on to the exact process of depositing online and offline, let us look at a few mistakes you should avoid during the deposition process.

  1. Challan type: Ensure you use only challan type 281 for deposit.
  2. TAN and other details: Quote the correct ten-digit TAN and your name and address on each challan used for depositing tax. If you are unsure about your TAN number, you can verify it from the official website prior to depositing TDS.
  3. Select the correct assessment year: People often confuse the financial and assessment years. Remember that the assessment year is the year that immediately follows the financial year for which the TDS return has been filed.
  4. A challan per category: You need to use separate challans to pay TDS under various sections and stipulate the correct payment code in the challan. For instance, code 94C is for payment to contractors and sub-contractors, and 94I is for rent. You can find the list of codes behind challan 281.
  5. Different deductees, different challans: Make sure you use separate challans for payment for different types of deductees (Corporate or Non-Corporate) and specify the deductees in the challan. For example, for corporate deductees, you will indicate Company Deductees – 002′, while for non-corporate deductees, you will mention Non-Company Deductees – 0021.

Making an Online TDS Payment

Now that you have an idea of what TDS payment entails, here is a step by step process to pay TDS online.

Step 1: Go to the official Income Tax Department website: http://incometaxindiaefiling.gov.in/ and click on Login Here.

Step 2: On the next page, look for CHALLAN NO./ITNS 281 from the list of challans and click on Proceed.

Step 3: Once the form opens, fill in all the relevant details. Make sure to cross-check them before moving on to the next step.

Step 4: Enter your TAN digits. Once the number is verified and validated online, you can proceed to fill out other challan details.

Step 5: Click on Submit, and you will see a confirmation page. Once you confirm that all the details provided by you are valid, you will get redirected to the bank’s payment gateway.

Step 6: Login into the online net-banking page with the bank assigned username and password. You can now make the online TDS payment, as specified in the challan.

Step 7: Once the payment is successful, a page will display a challan counterfoil/ receipt, which includes:

  • The Challan Identification Number (CIN),
  • Payment details, and
  • The bank name through which you made the e-payment.

A week after filing the TDS, you can check the status of the challan via the CIN produced on the Challan Status Inquiry page.

Prior to uploading the TDS online statement:

  • Ensure you are registered in the e-Filing portal and have a valid TAN to upload TDS.
  • Remember to register a valid Digital Signature Certificates (DSC) on the portal.
  • Use the Return Preparation Utility (RPU) and File Validation Utility (FVU) softwares to prepare the TDS statement and validate it. You can download these tools from tin-nsdl.com (https://www.tin-nsdl.com/).
  • Validate the Bank Account/Demat Account details and link of the principal contact before depositing the TDS online.

Making an offline TDS payment

Step 1: Print out challan 281 and fill in the relevant details.

Step 2: Visit the nearest authorised bank and submit the challan.

Step 3: Once the details are verified, you can make the payment via cash or cheque.

Step 4: Once the challan is processed, the bank will provide a stamped receipt or counterfoil as proof of the TDS payment.

How Can Vakilsearch Help You?

We help you digitise all your legal and financial processes that help streamline your business operations. Keeping up with the quarterly TDS payments can be inconvenient, not to mention every detail of the TDS return has to be accurate. At Valki Search, we take care of all your TDS deposition needs, from preparing the statements to obtaining the refunds, we act as your ever present guides throughout the process. Find out more about our TDS payment service here, and have experts file your TDS return today.

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