Under traditional practice, the government used to collect taxes manually through bank branches. This manual process was cumbersome as well as prone to errors. To overcome the issues of manual collection, advisory group on tax reforms under the chairmanship of Dr. Vijay Kelkar recommended networking of Income Tax Department, banks and Reserve Bank of India. This was proposed as it would facilitate online transmission of details of tax collected, deposited, refund, etc between these entities. To facilitate this online process, core group from RBI, Indian Banks Association, Central Board of Direct Taxes and Controller of Accounts worked together and came up with Online Tax Accounting System (OLTAS) for Direct Taxes.
Download TDS Challan 281: Click here
OLTAS was introduced in 2004 for collection, accounting and reporting of receipts and payments of Direct taxes. These taxes can be paid online or through network of branches. It also facilitates tax payers to track the status of their challans or e-challan deposited in banks online. Under this system, the details of tax paid flows from banks to Tax information Network (TIN) maintained by NSDL. Unlike traditional system in which three copies of challans were issued, in OLTAS, single copy of challan is issued with a tear off strip for tax payer.
Following are the three types of challans introduced by the Income Tax Department:
- Challan No. ITNS 280 – This form is used for the payment of Income Tax; such payment can be in the form of Self-Assessment Tax, Advance tax, tax on regular assessment, tax on distributed profits or income. Tax can be paid online or through cheque, DD, etc. at various bank branches. Irrespective on the mode of payment, Challan ITNS 280 shall be used.
- Challan No. ITNS 281 – This Challan is used for depositing Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).
- Challan No. ITNS 282 – This is to be used in case of payment of Gift Tax, Wealth Tax, Expenditure Tax, Estate Duty, Securities Transaction Tax and Other Direct Taxes.
Challan No. ITNS 281
This challan is used for depositing TDS and TCS by corporate as well as non-corporate entities. TDS or Tax Deducted at Source is a mechanism introduced by the Government in which the person (deductor) before making the payment of specified nature (such as salary, rent, etc.) to the payee (deductee) shall deduct tax at specified percentage from such amount payable and deposit it to the Income Tax Department. TCS or Tax Collected at Source is the tax collected by the seller from the buyer at the time of sale of specified goods.
Due date for filing TDS Challan
TDS is to be paid by all assessees who have deducted TDS at the time of incurring expenditure. The due date for payment of TDS is different for government assessee and non-government assesses.
Due date for payment in case of non-government assessee:
- Tax is to be deposited for months other than March – 7th of the next month. For example, if the TDS is to be deposited for the month of August 2016, the due date shall be September 7, 2016.
- Tax is to be deposited for the month of March – 30th April. For example, if the TDS is to be deposited for the month of March 2017, the due date shall be April 30, 2017.
Due date for payment in case of government assessee:
- Tax Deposited without challan – Same day
- Tax deposited with challan – 7th of the next month. For example, if the TDS is to be deposited for the month of May 2017, the due date shall be June 7, 2017
Unlike for non-government assesses, in case of government assesses, for the month of March also, the payment is to be made by 7th of the next month. Hence in case the TDS is to be deposited for the month of March 2017, the due date shall be April 7, 2017.
Consequences in case of delay
In case where TDS is deducted on time but not deposited within the specified time period (i.e. 7th of the next month or 30th April in case of March) interest on such amount is payable at the rate of 1.5% per month from the date on which it should have been paid.
For example, If the TDS for the month of October 2016 is deposited on December 15, 2016, then in such case the due date of payment was November 7, 2016 however since the payment is not made in time interest at the rate of 3% will be payable, i.e. for two months, November as well as December.
Challan no ITNS 281 Form
Following are the details that are required to be filled in ITNS 281:
- Tax Applicable: This is the first column of the form, it has two options:
- 0020: This is applicable in case of income tax of companies, i.e. if the deductee is a company such as ABC ltd. then code 0020 should be selected. Whether an entity is a company or not can be checked by the PAN no. of the entity, in case of a company the fourth letter of the PAN No. shall be “C”.
- 0021: This is applicable in case of income tax for other than companies, i.e. if the deductee is not a company, it may be an individual, HUF, partnership firm, etc.; this code should be selected.
It is to be ensured that separate challans are to be used for different types of deductees, i.e. corporate and non corporate and accordingly codes should be selected.
- Assessment year: Assessment year is the year in which tax is to be paid in respect of the income earned during the previous year. Assessment year is the year next to previous year.
- TAN No., Name and address: Enter the TAN no. and name of your company. TAN no. or Tax Deduction and Collection Account Number is a unique 10 digit alpha numeric number issued to the persons who are required to deduct or collect tax on the payments made/received by them under Income Tax Act, 1961.
In case of online filing of challan, name as per Income Tax Department database based on TAN No. entered shall be automatically captured on the confirmation screen.
- Type of payment: It relates to the TDS payment category:
- If the tax is paid by the tax payer on monthly basis on his own, then tick on “TDS/TCS payable by tax payer”.
- If the tax is paid by the tax payer based on the demand raised by Income Tax Department, then tick on “TDS/TCS regular assessment (Raised by IT Department)”
- Nature of Payment: Code as per the section under which TDS/TCS is deducted is to be filled in here. For eg., in case of interest on securities code will be 193, in case of dividend code will be 194, etc.
It should be ensured that separate challans are used for payment under different sections. For example if the payment is to be made for interest on securities and one for dividend, in such case separate challans should be made specifying different codes for each kind of payment.
- Details of Payment: Enter the details of payment, i.e. income tax, surcharge, etc. in amount as well in words. Details of cheque, DD, etc. also needs to be entered along with the date and bank branch.
Process for filing Challan Online
- Logon to e-Tax Payment System site link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp.
- Click on Challan No./ ITNS 281.
- Fill in the required details such as TAN no., address, mode of payment, bank name, etc. and click on proceed.
- Confirmation screen will be displayed, check the details entered.
- Click on “Submit to bank”.
- It will be redirected to the net-banking site of the bank.
- Enter the user id and password provided by bank for net-banking purpose.
- Enter the payment details, i.e. the amount to be paid.
- Click on submit
- On successful payment, a challan counterfoil shall be displayed containing the CIN No., payment details, and bank name through which e-payment has been made.
Process for Offline Challan Submission
- Download the excel format of TDS challan
- Enable editing and content
- Fill in the required details
- Take the printout of the challan
- Submit the challan to the bank along with the amount to be paid
- On submission of the challan, bank will issue a counterfoil/ receipt back stamped as a proof of submission.
Payment can be made in cash as well as cheque. In case payment is made at the branch where the payer has an account and such payment is made in cash/ cheque, bank shall accept the cash or cheque and will immediately stamp the counterfoil of the Challan with a rubber stamp containing the Challan Identification Number. However, if the payment in the form of cheque/DD is made at any other branch, the collecting bank branch shall accept cheque or draft and issue a paper token in acknowledgement. When this token is presented at the branch after encashment of the cheque, the bank shall provide the acknowledgement counterfoil duly stamped with the Challan Identification Number.
Challan Identification Number or CIN is a unique number issued to acknowledge the payment of tax. It consists of three parts, 7 digit BSR code of the bank branch where tax is deposited, Date of Depositing tax (in DD/MM/YY format) and Challan’s Serial Number.
How to check the challan status online
The online status of challans deposited can be checked online on website of Tax Information Network at https://tin.tin.nsdl.com/oltas/servlet/QueryTaxpayer. The enquiry can be done by banks as well as tax payers. Below are the details that are required to be entered by the tax payer based on the type of view:
- CIN Based view:
- BSR Code of collecting branch
- Challan Tender Date (Cheque/cash deposit date)
- Challan Serial No.
- Amount (Optional)
- TAN based view:
- Tax Deduction/ Collection Account No. (TAN)
- Challan Tender Date/ Date of Deposit (Period)
Below are the details that are required to be entered by the collecting branch:
- OLTAS user id and password
- Branch scroll date
- Major Head Code description
Below are the details that are required to be entered by the Nodal branch:
- OLTAS user id and password
- Nodal scroll date
- Major Head Code description
Information that can be accessed at challan status enquiry
Challan Status Enquiry by Tax Payers:
- CIN based view: On the basis of CIN details and amount, the tax payer can view the following details:
- BSR Code
- Date of Deposit
- Challan Serial Number
- Major Head Code with description
- Name of Tax Payer
- Received by TIN on (i.e. date of receipt by TIN)
- Confirmation that the amount, if entered, is correct
- TAN based view: By providing TAN and Challan Tender Date range for a particular financial year , the tax payer can view the following details :
- Major Head Code with description
- Minor Head Code
- Nature of Payment
If the tax payer enters the amount against a CIN, the system will confirm whether it matches with the details of amount uploaded by the bank.
Challan Status Enquiry for Banks: Tax collecting bank branches and the nodal branches can access following details:
Further, for each Nodal Branch Scroll Number, information that can be accessed are: