TDS Online Payment
TDS or Tax Deducted at Source is the amount that a taxpayer must pay to the government if his income exceeds a specified limit. Any individual whose income exceeds the prescribed threshold must make the TDS payment either online or offline. The income tax department of India prescribes the rates for TDS.
The individual or the company that pays the tax is called the deductor, and the individual or company that receives the payment is called the deductee. The deductor is responsible for deducting TDS before making payments and depositing the same with the Indian government.
Tax deducted at source is calculated at the prescribed TDS rates and must be deposited with the government within the stipulated period.
The reason behind introducing TDS is to collect tax from the source of income. The tax deducted will be transferred to the account of the Central Government, and the deductee whose income got the tax cut will get credit for the amount deducted. The credit is based upon the TDS certificate and Form 26 as issued by the deductor.
Benefits of TDS Online Payment
- Facility to avail 24*7 TDS payment facility on all 365 days of the year
- Convenient mode for the deductor to make the e-TDS payment
- Acknowledgment for TDS online payment received immediately
- Facility available to download the challan acknowledgment copy and save them for future reference
- A transparent online payment system that can reduce chances of fraud, corruption, and malpractice
- E-TDS is environment friendly as manual filing will require a considerable amount of unnecessary paperwork
How is the TDS payment calculated?
Tax deducted at source is a way of discharging the tax liability of an individual or an indirect way of deducting tax. TDS is deducted on the following sources of income:
- Interest paid by banks
- Rent payments
- Professional and Consultation fees
- Commission Payments
A TDS return is the summary of all transactions made during a quarter. It is a quarterly statement that the deductor submits to the Income Tax Department. After the deduction of TDS, he must deposit the corresponding amount and details to the government through a TDS return form. There are different forms for different TDS deductions.
Modes and Dates of TDS e-Payment
The different modes through which tax deducted at source can be deposited to the central government account are:
TDS e-payment is mandatory for all corporate assesses and all assesses of companies other than those for whom the provisions of Section 44 of the Income Tax Act are applicable.
TDS Physical payment
Through physical mode, the deductor must furnish challan 281 in the authorized bank.
TDS online payment Dates
For government assesses, the TDS returns must be filed within the following dates:
- Payment of TDS amount without challan must be on the date of deduction
- Payment of TDS amount with challan must be on the 7th day of the succeeding month
- For other assesses, the TDS returns must be filed within the following dates
- From March until April 30th of the succeeding year for the deposit made by individual taxpayers
- On the 7th day of the succeeding month for the deposit made by the employer
TDS e-payments can also be made quarterly with permission from the assessing officer. The dates for them are:
- July 7th for the quarter ending June 30th
- October 7th for the quarter ending September 30th
- January 7th for the quarter ending December 31st
- April 7th for the quarter ending March 30th
How to Make TDS Online Payment
To avail the TDS e-payment facility, the assessee must have the net banking account or debit card details ready. The tax information network has a list of banks that are approved to accept payments. The deductor must first select the appropriate challan to begin TDS online payment.
The detailed steps are as follows:
- Visit the website of the Income Tax Department
- There are several challans for making payments; the deductor must choose Challan ITNS 281, which is used to deposit TDS by an individual or a company deductee
- Fill in all the challan details such as:
- Company or a non-company deductee
- Whether the TDS is payable by the taxpayer himself or a result of a regular assessment or as a response to demand from the income tax department
- Select the type of payment for the TDS amount. Different TDS rates apply to different types of payment. Choose the mode of payment. The payment mode can be either through net banking or debit card of the taxpayer
- The TAN details of the taxpayer must be entered next. This information is used to check the authenticity of the TAN number. If the TAN details do not match with the database of the income tax authorities, the taxpayer cannot proceed further
- Enter the right assessment year, which is the year following the financial year in which tax is payable
- Fill in other details as per the form such as Email Id, mobile number, and address
- Once the above data is submitted, the next page will ask confirmation of the details entered in the challan. Once the assessee verifies the challan details, the portal will take the taxpayer to the payment page
- The NSDL will redirect the user to the net banking page of the chosen bank, where one can log in with the user Id and password. One must pay the stipulated amount of TDS
- Once payment is made, the counterfoil of the challan will be displayed with the Challan Identification number or CIN. This will have the payment details, date, bank name, and branch of the TDS e-payment
- The collecting branch of the bank will transmit these details to the Tax Identification (TIN) through the OLTAS - Online Tax Accounting System
- Status of TDS e-payment can be known by tracking the status of the challan deposited in the bank from the "Challan Status Inquiry" option on the NSDL website. This can be viewed through CIN based search or TAN based search
Eligibility Requirements for Making TDS Payment
The following are the eligibility requirements for paying TDS online:
- All corporate must pay TDS assesses
- Apart from companies, TDS must be paid by all assesses who come under section 44B of the Income Tax Act
- The taxpayer must have a valid TAN and a PAN number
- The taxpayer must have an internet banking account
- The taxpayer must be an Indian citizen and have adequate balance in their bank account
- Compulsory TDS e-payment for those who pay income tax is applicable for Tax Deducted at Source payment, Tax of Self-Assessment for Income tax, Tax Collected at Source, and Tax for regular assessment of Income Tax
Ans: If the TDS certificate is not received, TDS can be claimed in one's income return. The tax credit will be shown in Form 26AS. This Form 26AS can be checked to claim the tax credit.
Ans: The individual must obtain a TAN (Tax deduction Account Number) and include this number in all correspondence related to TDS payment.
- The individual must deduct TDS at the applicable rates
- The individual must pay the TDS due to the government before the prescribed due date
- The individual must file the periodic TDS return within the stipulated due date
- The individual must issue the TDS certificate to the payee for the TDS paid within the specified date
Ans: If a taxpayer does not make his TDS online payment, then the individual will be discharged from tax liability but also cannot avail of the tax credit for the amount.
Ans: TAN denotes Tax Deduction Account Number, and PAN represents Permanent Account Number. TAN must be mentioned in all documents for TDS payment, while PAN is an essential identity for individual taxpayers.
Ans: NRIs need to pay different amounts of TDS if the property belongs to them. The rates to be paid are prescribed in Section 195 of the Income Tax Act.
Ans: The interest charged for late payment of TDS is 1.5% per month.
Ans: Challan 281 is used for TDS payment.
Ans: TDS payment challan can be downloaded from the official website of NSDL by searching through either CIN or TAN. Once details are filled in, it can be downloaded from the website.
Ans: TDS is applicable for advance payments for the supply of certain goods and services. But the value of the goods must be more than Rs. 2,50,000 excluding GST.
Ans: Income Tax Act 1961 says that all government and corporate deductor must file their TDS returns through TDS e- payment. The deductor other than the corporates and the government can file their TDS online or physically.