How to Pay TDS Online Without any Error

Everyone has to pay taxes to the Government either directly or indirectly. The Income Tax Act 1961 governs the payment of direct taxes. A person is liable to pay tax as per the provisions laid under the Income Tax Act. Tax Deducted at Source (TDS) is a mode mentioned under the said act. Under the provision of the act, a person who is a taxpayer can deduct an amount from the total amount payable to another specific person. Later the person who has deducted the tax at the source has to deposit the amount to the Central Government. Since the tax is paid from the amount of another person, it is an indirect mode of tax deduction. The deductor has to follow specific procedures for TDS online payment. 

Did you know?

Deductee gets the credit of the amount based on Form 26AS or the TDS Certificate.

Applicability of TDS

TDS is applicable to various sources of income of the Assesse. Some of the incomes where TDS is applicable have been given below:

• Income received from Dividend.
• Income from interest on securities.
• EPF amount withdrawn before the specified period or over the specified limit.

Also read: Penalty for Late Filing of Income Tax Return

• Payment to contractors and jobworkers.
• Payment to brokerage.
• Sale of immovable property.
• Rent, royalty and income.

What is TAN?

• TAN is a number issued by the income tax department issued to the person who deducts tax against the payment made to a specified persons.
• It is a ten-digit number which you will have to mention in all TDS returns, related documents and involvement with other communication with the Income Tax Department.  Failure to mention TAN will lead to penalty of ₹ 10, 000/-

Although many people think that TAN and PAN are same and can be used interchangeably is not correct at all. The taxpayers must have TAN besides having PAN. You can use PAN for the payment of TDS.

Due Dates of Filing TDS

The due date and the quarter to file TDS have been mentioned in the table below:

Eligibility to Pay TDS

The following individuals or organisations can deduct TDS to make the payment of TDS

• Private or public companies
• Hindu Undivided Family
• Trusts
• Partnership Firms
• Co-operative Societies
• Individuals

Procedures to Be Followed for the Payment of TDS Online

The deductor should have a net banking account or a debit card to pay TDS online. Deductor has to undergo the following procedures.

• Visit the Website

The deductor has to visit the NSDL's website to pay online TDS.

• Select Challan No

After visiting the website, you will have to select CHALLAN No./ ITNS 281. After selecting it, an e-payment page will appear before you.

• Enter the Details

You will have to enter the following details on the e-payment page.

• You must select options between "Company Deductees" and "Non-Company Deductees" under Tax Applicable. You will have to select "Company Deductees" when the deduction of TDS occurs while making a payment to a company.
• Give TAN and Assessment year of payment.
• Give the PIN code and select the State.
• You will have to select whether the deducting amount is payable by you or for regular assessment.
• Select either of the options between Nature of Payment and Mode of Payment.
• After entering all the details, submit the Select button.

• Appearance of Confirmation

After submitting all the details, the Taxpayer's full name will appear on the Confirmation Screen if the TAN is valid.

• Net Banking Site

After confirmation of the details, you will be directed to your bank's net banking site. The deductor must log in to the site and pay the tax using a user ID and password.

• Successful Payment

After the successful payment, CIN, payment details, and bank name will appear on a challan counterfoil as proof of payment. 

After the payment of TDS online, the bank will refer the information to the Tax Information Network (TIN) through Online Tax Accounting System. The income Tax department initiated Online Tax Accounting System to receive records of taxes paid by banks.

Income Sources Where TDS is Applicable

TDS applies to various sources of income. Some of these have been mentioned below:

• Salary

The employer has to deduct TDS on the total amount of income after all the deductions and exemptions. TDS rate is determined based on income and deductions of the individual.

However, there are some conditions in case of deduction of TDS of a salaried person. You will not be liable to pay TDS if your annual income is below ₹ 2.5 Lakhs.  
 

• Sale of Immovable Property

TDS is applicable in the case of property worth more than ₹ 50 Lakhs. There is also the provision of payment of TDS on an instalment basis. Buyers can deduct tax after obtaining a Tax Deduction Account Number, and TDS must be deposited within one week from the end of the month of TDS deduction.

Also read: What Are the Components of Income Tax Law in India?

• Income on Interest

Banks will deduct TDS if the interest rate of FDs and RDs exceeds ₹ 10,000 per year. A person under the category of higher tax slab will have to pay additional tax. The TDS rate will be 10% if PAN is available; otherwise, the rate will be 20%.

• Withdrawal of EPF

Withdrawal of amount from Employees Provident Fund will lead to TDS online payment in case the withdrawal before the completion of five years of service. However, the deduction is not applied if the withdrawal amount is less than ₹ 30,000. TDS rate will be 10% of the withdrawal amount in case of PAN availability; otherwise, it will be 20% of the total amount.

The Process to Check the Status of TDS Online Payment

To check the status of the payment of TDS online, 

• You will have to visit tdscpc.gov.in 
• Put the Captcha code and proceed
• You will have to enter the details like PAN of Deductee, TAN of Deductor, Financial Year, and Type of Return.
• You will have to Click on view Form 26AS.
• If you want to download the file, you will have to select the year and PDF format. 
• Click on the Go button.
• You will be able to check the status after visiting tdscpc.gov.in. 

Importance of TAN for Online TDS

TAN refers to Tax Deduction and Collection Account Number. Every assessee requires to possess a TAN. While filing online TDS, you must mention 10 digit number known as TAN in TDS returns. It is mandatory to mention TAN in all the documents related to TDS, and failure to do so will face a penalty for the person liable to deduct TDS.  

Advantages of TDS Online Payment

There are many advantages of the payment of online TDS. These are

• Net banking allows you to pay TDS from anywhere at any time. You do not need to wait for a particular date or time.
• The Income Tax Department will receive whatever details you have included on the e-challan, and there will be no third-party intervention.
• The funds will transfer instantly from your account.
• You can save and print the challan and receive a copy for future reference.
• After the authorisation by the bank, the bank will provide a receipt or counterfoil.
• You can check the status of your payment online.

TDS Certificates

There are different types of TDS certificates which have been mentioned below.

• Form 16

This TDS certificate is issued on payment of salaries. The employer issues this certificate to the employees whose taxable income is more than ₹ 2.5 Lakhs.

• Form 16A

The issuance of this certificate applies if the payment is other than salary, and the issuance happens within 15 days of filing the return.

• Form 16B

This certificate applies in the case of the sale of the property. It is also necessary to issue within 15 days from the due date of filing the return.

• Form 16C

The issuance of this certificate applies to the deduction of rent payment.

Penalties in Case of Failure to File TDS Return

You will have to face penalties if you fail to file TDS returns. The Income Tax Department will levy different penalties for different activities:

• If you fail to submit your return, the department will levy a penalty of ₹100 each until the submission of the amount.
• If you fail to file your return on time, the penalty will be ₹200 for each day till the return remain unfiled.
• In case of filing a TDS return default, the penalty will be between ₹10,000 to ₹1 Lakh.
• If you submit incorrect details, including PAN, particulars of challan, and TDS amount, the penalty will be between ₹10,000 to ₹1 Lakh.

Also read: Know About Section 194D and 194DA of the Income Tax Act 1961

Conclusion

Tax payment on time is the responsibility of all who are liable to pay tax. Tax Deducted at Source (TDS) is also one of those tax payment modes. The payment of  TDS online has made the process easier. People can pay TDS with the help of net banking at any time without delay. In case of failure to make the payment of TDS, the assessee may have to face the penalty. Therefore TDS should be paid before the expiry of the time limit to avoid penalty. 

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