Guide to Online TDS Payment

TDS or Tax Deducted at Source is a way of collecting Income Tax by the Government of India. The TDS mechanism ensures the Government receives income tax from the assesse at the time of transaction – thereby minimizing tax default risk and ensuring timely collection of the tax.

TDS or Tax Deduction at Source is a system where tax or TDS gets deducted and TDS payments happens online. The tax deduction is at the time of making some payments like rent, interest, commission etc. The person making such specified payments is responsible for deducting the TDS and making TDS payment and paying the balance amount to the person entitled to receive such payment.

TDS Payment

TDS is deducted by the person paying the income. Thus, the tax is deducted at the source of income itself. The tax deducted is then deposited by the payer of the income into the income tax department account on behalf of the payment recipient as TDS payment. The TDS payment is thus deemed to be payment of income tax by the recipient at the time of his assessment.

TAN Registration

TAN registration or Tax Deduction and Collection Account Number (TAN) is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. All those persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to obtain TAN.

When TDS Deduction and TDS Payment is Required

Salary and all other positive incomes under any head on income( Section 192 )
Interest on securities ( Section 193 )
Interest other than interest on securities( Section 194A )
Payments to contractors and sub-contractors( Section 194C )
Winnings from Lottery or crossword puzzles( Section 194B )
Winnings from horse races( Section 194BB )
Insurance Commission covering all payments for procuring Insurance business( Section 194D )
Any interest other than interest on securities payable to non-residents not being a company or to a foreign company(Section 195 )
Payment to non-resident sportsman including athlete or sports association/institution.In case of non-resident sportsman,payments in respect of advertisements as well as articles on any game/sports in India in newspapers,magazines,etc. is included( Section 194E )
Payment in respect of deposits under NSS[National Savings Scheme]( Section 194EE )
Payment on account of repurchase of Units by Mutual Fund or UTI( Section 194F )
Payment for Commission or brokerage( Section 194H )
Payment of rent( Section 194I )
Payment of fees for professional or technical services( Section 194J )
Commission to Stockist,distributors,buyers and sellers of Lottery tickets including remuneration or prize on such tickets(Section 194G )
Income from Units purchased in foreign currency or long-term capital gain arising from the transfer of such Units purchased in foreign currency ( Section196B )
Payment of any income to non-residents in respect of interest or dividend on bonds and shares( Section 196C )etc.

Procedure for making online TDS Payment

To make online TDS Payment, logon to the e-Tax Payment System and follow the steps below:

Select the relevant challan online, as applicable
1. Income Tax Challan No ITNS 280
2. Income Tax Challan No ITNS 281
3. Income Tax Challan No ITNS 282
4. Income Tax Challan No ITNS 283
Enter its PAN / TAN as applicable. There will be an online check on the validity of the PAN / TAN entered.
If PAN/ TAN is valid the taxpayer will be allowed to fill up other challan details like accounting head under which payment is made, name and address of TAN and also select the bank through which payment is to be made, etc.
On submission of data entered a confirmation screen will be displayed. If the taxpayer confirms the data entered in the challan, it will be directed to the net-banking site of the bank.
The taxpayer will login to the net-banking site with the user id/ password provided by the bank for net-banking purpose and enter payment details at the bank site.
On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.

Due Date for TDS Online Payment

Non-government tax deductors can deposit TDS online for:
1 – Tax deducted for the months April to February – by the 7th of the following month
2 – Tax deducted in March – by the 30th of April

For example, if you deduct tax in July, the TDS amount can be deposited by the 7th of next month, i.e. by the 7th of August.

In case of tax deducted on purchase of immovable property, the time limit for TDS deposit is the 30th of the following month in which the property is purchased.
For example, if you purchase the property in June, TDS can be deposited by the 30th of July.

How to check the status of online TDS Payments?

The taxpayer can check the TDS deposit status online. To check the TDS deposit online, go to TIN-NSDL Oltas challan status Inquiry. There are two ways to search the challan status of TDS payment.

1 – CIN Based View

On entering the challan details, such as the BSR code of collecting branch, challan date, challan serial number, and amount (optional), the taxpayer can view the following details:

Challan serial number
Date of deposit
BSR code
Major Head Code with description
TAN/PAN
Name of taxpayer
Receipt date by TIN
Amount confirmation, if it is entered (correct or not)

2 – TAN based view :

By providing TAN and challan date range for a particular financial year, the taxpayer can view these details:

CIN
Major Head Code with description
Minor Head Code
Nature of Payment

If the taxpayer enters the amount against a CIN, the system will confirm whether it matches the details of the amount reported by the bank.

Advantages of Online TDS Payment

You can pay taxes anytime and from your net-banking account.
2. The TDS amount gets transferred instantly through your account.
3. Online TDS payments to the income tax department will avoid the errors made by the bankers
4. You can save/print the challan and the counterfoil generated from your bank.

What happens if you delay in payment of TDS?

If any person deducting tax at source fails to deposit the whole or any part of the tax to the income tax department, then such person shall be liable to pay simple interest on the TDS.

Interest at 1.5% will be payable for every month or part of a month on the TDS amount from the TDS deduction to the date of the TDS payment to the income tax department.

FAQs

Can I view the TDS paid tax challans online?

The tax department offers an online facility to view and enquire about challan status. By visiting the official portal of TIN-NSDL, taxpayers can monitor their challan deposits and therefore, can verify the details concerning their taxation related payment. TDS challan status can be tracked on the online mode via two views – TAN view and CIN view. In the TAN view mode of challan tracking, the TAN number serves as the identification number for challan tracking. For any tracking of transactions related to TDS deduction and remittance against the same, TAN is mandatory to be mentioned by the deductors. In the TAN view mode of challan tracking, the information which can be fetched includes the CIN (Challan Identification Number), Minor and Major Head Codes and the mode/nature of the payment. The deductor has to mention the TAN, and CTD (Challan Tender Date) and these details can be viewed. In the CIN mode, the challan number serves as the identification number. And the deductor can view all the relevant details

What if I quoted the wrong TAN unintentionally while making TDS payment?

Clerical errors while making payments are possible, and hence the taxation department allows for corrections to be made to the challan. The consequences of the wrong challan are that the deductee will not be able to claim the credit. Hence corrections in the challan generated can be affected through TRACES (TDS Reconciliation Analysis and Correction Enabling Systems). Depending on the field that requires correction, either the assessing officer or Bank can authorize it. The Assessing Officer authorizes TAN/PAN corrections.

How can I create a Nil TDS challan?

To create a NIL TDS challan, the deductor must fill up all amount columns as ‘Zero’ and leave the field containing Cheque/DD number as blank.

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