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TDS (Tax Deducted at Source) is a specified amount that is deducted when a payment is made such as a salary, commission, rent, interest, professional fees, and so on. The person who makes the payment deducts tax at the source, whereas the person who receives the payment/income is required to pay tax. It reduces tax avoidance because the tax is collected at the time of payment.
Taxpayers can use internet banking or online payment facilities to make TDS payments during the challan creation process, in addition to depositing the TDS money with the banks listed below.
Authorised Banks for e-Tax Payment
The following is a list of TDS payment authorised banks.
- Allahabad Bank
- Bank of Andhra Pradesh
- Bank of Baroda
- Bank of India
- Canara Bank (Maharashtra-based bank)
- Corporation Bank of the Central Bank of India
- Bank Dena
- ICICI Bank HDFC Bank
- IDBI Bank Limited is a subsidiary of the Indian Bank.
- The Indian Overseas Bank
- Bank of Jammu & Kashmir
- Punjab National Bank Oriental Bank of Commerce
- Bikaner State Bank
- India’s State Bank
- State Bank of Indore
- State Bank of Mysore
- State Bank of Travancore
- Syndicate Bank
- State Bank of Indore
- BANK OF UCO
- Union Bank of India (UBI)
- United Bank of India (UBI)
- The Vijaya Bank
Eligibility of TDS E-payment
With effect from April 1, 2008, the following assessees are required to pay taxes electronically.
- The entire corporation evaluates.
- All assesses (other than corporations) to whom Section 44AB of the Income Tax Act of 1961 applies.
Claiming refund of TDS on bank deposit
If the bank deducted TDS on a bank deposit from a taxpayer who is not required to pay tax, the person must file income tax returns to demand a refund of the tax deducted by the bank. Because the procedure of filing an income tax return and obtaining a refund is time-consuming, it is suggested that all taxpayers who are not obligated to pay taxes file Form 15G.
How to make a TDS payment online?
- Step 1: To pay taxes online, go to the Income Tax Department official website: https://www.tin-nsdl.com/, and go to the e-payment section under services.
- Step 2: Choose the appropriate challan, for example, ITNS 281. This challan number is to be used by a corporation or non-company deductee to deposit TDS/TCS.
- Step 3: Determine the type of deductee. If the deductee is a person other than the firm, choose (0021) Non-Company Deductee; otherwise, choose (0020) Company Deductee.
- Step 4: Enter the PAN/TAN (if applicable) and other mandatory challan details such as the accounting head under which payment is made, the taxpayer’s address and the bank through which payment is to be made, and so on.
- Step 5: Decide on a payment method. If it is a typical payment, choose (200) TDS/TCS Payable by Taxpayer; otherwise, choose (400) TDS/TCS Regular Assessment if it is a payment against a demand lodged by the I.T. Department, such as a payment of interest or a late charge under Section 234E. (Raised by I.T. Department)
- Step 6: After entering the data, a confirmation box will appear. If the PAN / TAN is valid according to the ITD PAN / TAN master, the entire name of the taxpayer will be presented on the confirmation screen.
- Step 7: Upon validation of the data entered, the taxpayer will be routed to the bank’s net-banking site.
- Step 8: The taxpayer must log in to the net-banking site using the user id/password issued by the bank and enter payment information at the bank site.
- Step 9: After a successful payment, a challan counterfoil with the CIN (Challan Identification Number), payment details, and bank name from whence the e-payment was made will be displayed.
Use Vakilsearch`s Income tax calculator to decide your taxable profits and report your Individual Tax Return (ITR) with ease.
When is the TDS deducted and what are its responsibilities?
If an individual or HUF member pays rent and the amount payable exceeds Rs.50,000, a TDS of 5% will be deducted even if your books are not subject to a tax audit. If you are needed to have TDS deducted at the rate of 5%, you will not be required to apply for a Tax Deduction Account Number (TAN).
If you are employed, your employer will deduct TDS based on the applicable income tax slab rates. However, if they do not have your PAN, they will deduct TDS at a rate of 20%. TDS rates are set in the Income Tax Act for the majority of payments, and the payer deducts TDS at the corresponding rates.
You will not be required to pay any tax if you provide your investment proof to your employer and your total taxable income is less than the entire taxable threshold. As a result, no TDS will be levied in this case.
If you did not submit the investment proof to your employer and the bank deducted the TDS, you can file a return and demand a refund if your total taxable income is less than the total taxable limit.
Benefits of TDS payment
Since tax deduction occurs throughout the year, the government receives a steady stream of money. It is a tax evasion deterrent measure. It contributes to boosting tax reach because it is deducted at the time of payment, reducing fraud.
The following are the advantages of TDS Payment:
- It keeps people from avoiding paying taxes.
- It works in combination with a reliable source of funds.
- The tax collection base has been expanded.
- The Tax Collection Agencies’ and Deductor’s burden of responsibility is reduced.
- It is convenient for the deductee because tax is deducted automatically.
Closure
The majority of taxpayers are subject to TDS on bank deposits since interest on bank fixed deposits is fully taxable. If the total interest income for the year reaches Rs.10,000, banks will deduct TDS at a rate of 10% of the interest generated. TDS will be deducted at a rate of 20% of the interest earned if the account holder has not updated his or her PAN on the bank account. As a result, all taxpayers must check that their bank account conforms with KYC criteria.
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