Online Tax Accounting System or OLTAS is a system that is used to collect direct taxes from individuals, organizations and companies. It is the strategy of the Income Tax Department to get information. By uploading the challan details on the website, IT department is able to keep a record of all the taxes that have been paid through banks. With the following objectives, OLTAS was launched in April 2014:
- Accounting of direct taxes online
- Collection of direct taxes online
- Reporting receipts and payments of direct taxes online
Reasons for Introduction of OLTAS
Prior to the introduction of OLTAS, tax collection was a manual process done by the banks and their branches. This process was extremely difficult, long and was full of errors. There was a need to deal with such issues of the manual system. Thus, the Chairman of the Advisory Group of Tax Reforms, Dr. Vijay Kelkar gave recommendations to ensure that the Reserve Bank of India and the Tax Department will work in coordination to simplify the collection and transfer of tax and refunds online, without any manual intervention.
To ensure that the recommendations were followed and the process was carried out without any problems, the following bodies were asked to work in tandem:
- The Central Board of Direct Taxes
- The Controller of Accounts
- The Indian Banks Association
- The Reserve Bank of India
OLTAS was introduced when these bodies worked together and it was implemented in three phases.
This phase was conducted from 9th June to 15th July, 2003. It involved selected branches of 15 public sector banks in the four metro cities – Delhi, Mumbai, Kolkata and Chennai
Conducted from 1st September to 15th November, 2003, more cities were involved, which included Bangalore, Ahmedabad, Pune and Hyderabad.
This phase was carried on from 1st December 2003 to 31st May 2004. In this phase, 4 Private Sector Banks namely, HDFC, ICICI, UTI and IDBI joined in. The other 12 banks also joined the project which made it a total of 32 banks, including the apex bank of the country, Reserve Bank of India.
In the initial stages, the only component in the scope was the data which was related to tax information. However, after April 2005, the project went online and now the job of the banks was to reconcile the information and data received by TIN from the banks with the daily tax collected. TIN is the Tax Information Network and is set up by the National Securities Depository Ltd., to manage all the data and information about challans between the tax department and the banks.