Making TDS Payments Online in India - The Complete Guide

Long gone are those days where you had to struggle to make TDS payments physically to the department. Everything now has paved its way towards digitalization, including online TDS Payment.

Paying online TDS payment is quite an easy and convenient process. Hereby, we have curated this complete guide that will direct you on how you can pay TDS online. We’ll cover:

• What is TDS?
• Process of Depositing TDS
• Pre-requisites for Uploading TDS Statement
• TDS Applicability
• TDS Online Payment Due Dates
• Verify TDS Payment Status Online
• TDS Returns (E-File)
• Deadlines & Penalties
• Return Forms TDS
• TAN in TDS
• TDS Rate Chart for FY 2021-22
• TDS Filing Due Dates for AY 2021-22
• Online TDS Payment Advantages
• Frequently Asked Questions (FAQs)
• How Can Deskera Help You?

What is TDS?

Tax deduction at source or TDS is the tax amount deducted at the source of income. Every organization or individual is obligated to deduct a specified proportion as TDS before making full payment to employees, professionals, or contractors.

Further, it is regulated by the Central Board of Direct Taxes (CBDT)— a part of Indian Revenue Services (IRS).

Process of Depositing TDS

TDS must be deposited by any individual or business to the Central Income Tax Department by using TDS Challan 281.

TDS can be deposited in one of two ways: offline TDS or online TDS (e-TDS).

Offline TDS

TDS can be deposited by visiting an authorized bank branch and submitting a challan. Further, the bank will issue a stamped receipt or counterfoil as proof of TDS payment once the challan has been accepted.

Online TDS

Online TDS payments (e-TDS) can be made at the NSDL's official government website. It can be done by both corporate and non-corporate businesses.

Below is the listed procedure for making an electronic payment. Check out:

Step 1: Visit http://incometaxindiaefiling.gov.in/ and click the ‘Login Here' button.

Step 2: On the following page, you'll find a list of challans that apply. Further, you must choose the option 'CHALLAN NO./ITNS 281'.

Step 3: Enter all relevant details as required in the form.

Step 4: Enter the TAN number and the legitimacy of the TAN entered for TDS payment will be checked online. Moreover, if the taxpayer's TAN is verified to be valid. Then, he or she will be able to fill out other challan details.

Step 5: A confirmation page would appear when the data was submitted. Moreover, if the taxpayer validates the information given in the challan. Then, the page will be redirected to the bank's net-banking page, where the payment will be made, as specified in the challan.

Step 6: The Taxpayer has to login into the online net-banking page. It can be done by using the user-id and password provided by the bank. And, making the TDS payment.

Step 7: A challan counterfoil including the Challan Identification Number (CIN), payment details, and the bank name via which the e-payment was made would be displayed after a successful TDS Payment.

The payment has been made, as evidenced by the counterfoil. Further, after a week of making the payment using the CIN produced, you can check the status of the challan via the NSDL-TIN website's "Challan Status Inquiry."

Note: The Deductor shall issue a TDS Certificate on Form 16/ Form 16A on an annual/quarterly basis once you deposit the TDS with the Income Tax Department.

Pre-requisites for Uploading TDS Statement

• The user must have a valid TAN and be enrolled in e-Filing in order to upload TDS.
• The Return Preparation Utility (RPU) should be used to prepare the statement. And, the File Validation Utility should be used to validate it (FVU). The tools are available for download at tin-nsdl.com (https://www.tin-nsdl.com/).
• In e-Filing, a valid DSC should be registered.
• Pre-validate the “Bank Account/Demat Account details“ or link of the Principal Contact. Make sure that the PAN of the Principal Contact is linked to Aadhaar.

TDS Applicability

TDS is not only limited to salaried individuals. Although, TDS can be used in a variety of situations, including:

• Profits earned from providing clients with technical or professional services
• Earnings from the internet are invested in securities and debentures.
• Payments made to independent contractors, subcontractors, and freelancers.
• Income from Dividends.
• Winnings from game shows, lotteries, crossword puzzles, and other types of games.
• Commissions from insurance or brokerage firms.
• Profits are derived from the sale of movable property.
• Income derived from royalties, etc.
• EPF funds withdrawal (before specified time or period).
  

TDS Online Payment Due Dates

TDS payment deadlines vary for government and non-government assessees, as noted below:

Quarterly Payment Option

The Assessing Officer may allow taxpayers to make TDS payments on a quarterly basis. This, however, can only be done with the Joint Commissioner's permission.

TDS return deadline dates for quarterly payments are listed below:

Further, all corporate assesses and other assessees subject to a Tax Audit under section 44AB of the Income Tax Act are required to deposit TDS online.

Nevertheless, assessees who do not fit into one of the above two categories can make online payments or deposit their funds with one of the designated institutions.

Verify TDS Payment Status Online

You may find out how to check your TDS by following the steps below:

• Visit www.tdscpc.gov.in/app/tapn/tdstcscredit.html for further information.
• Click on ‘Proceed' after entering the verification code.
• Please provide your PAN and TAN numbers.
• Choose a financial year, then a quarter, and finally a return type.
• Select ‘Go' from the drop-down menu. You'll be able to see your TDS details.

You can also verify the status of your TDS by doing the following:

• Visit www.incometaxindiaefiling.gov.in/home for further information.
• If you are a new user, you must first register. However, if you've already registered, then you need to enter your login credentials to access the portal.
• Go to ‘My Account' and select ‘View Form 26AS' from the drop-down menu.
• Choose the year and the PDF format, then save the file. Further, the file is password-protected, and the password is your date of birth. For example; if your birthday is June 7th, 1991, your password will be 07061991.
• You can also check the progress of your TDS payment through a net banking account. Further, to check the status of your TDS payment, your PAN must be linked to your net banking login.

TDS Returns (E-File)

• All corporate deductors are required to submit their TDS returns in electronic format (w.e.f June 1, 2003)(e-TDS returns).
• W.e.f. Government deductors were also required to submit e-TDS returns in the fiscal year 2004-05.
• Other deductors, aside from the government and corporations, have the option of submitting TDS returns in either electronic or paper format.

Deadlines & Penalties

The following is the deadline for paying tax deducted at source:

Delay in TDS Payment

If you delay your TDS payment, then according to Section 201 (1A) of the Income Tax Act of 1961:

• Non-Deduction of Tax at Source

You will be charged a monthly interest rate of 1% on the outstanding balance. Furthermore, this interest is calculated from the time the tax was deductible until the time it is actually deducted.

• Post Deduction of Tax at Source

If there is a delay after the deduction, you will be charged a monthly interest rate of 1.5 percent on the outstanding balance.

In addition, this interest is calculated for each month (or part of a month) that the TDS payment is late. It begins on the due date for tax deductions.

TDS Return Filing Deadlines

• TDS returns must be filed every quarter. Also, note that the deadline for filing is the 30th of the month after the end of the quarter.
• The deadline for filing TDS returns for the last quarter, i.e. January to March, is May 31st.

Section 221 of the Penal Code

• If a defaulter (TDS deductor) fails to deduct tax without any strong reason. Then, the deductor will be determined by the Assessing Officer and is required to pay a penalty.
• In any instance, the penalty should not be greater than the amount of tax owed.

Section 271C imposes a penalty

• If a deductor fails to deduct the required TDS amount, a penalty equivalent to the tax amount might be levied.
• Although only a Joint Commissioner of the Income Tax Department has the ability to charge such a penalty.

TDS dates of Filing TCS return

• TDS returns must be filed every quarter. And, the deadline for filing is the 15th of the month after the end of the quarter.
• However, the 15th of May is the deadline for filing TDS returns for the last quarter, i.e. January to March.

Return Forms TDS

Check this table below for TDS return forms. Let’s check:

TDS Returns (Late Filing)

• If an assessee fails to file a TDS return within the statutory time period. Then, the individual would be subject to a penalty of Rs. 200 per day till the failure continues.
• Further, it is according to Section 234E of the Income Tax Act of 1961. The overall penalty amount, however, must not exceed the total amount of TDS collected.
• If you fail to file your TDS return within one year of the due date. Then, you will be fined between Rs. 10,000 and Rs. 1,000,000.

TAN in TDS

• The Tax Deduction and Collection Number (TAN) is a number issued by the Internal Revenue Service. Further, it is assigned to those persons who are responsible for deducting tax from payments made to certain individuals.
• As per Section 203A of the Income Tax Act, 1961, it is a ten-digit alphanumeric number that must be included in—  TDS returns, payments, associated documents, and any other communication with the income tax department.
• A penalty of Rs. 10,000 will be imposed if the TAN is not mentioned.

Note these below-mentioned points:

• PAN and TAN are different from each other.
• The former is Permanent Account Number, a 10-digit identification number assigned to taxpayers. And, the latter is a Tax Deduction Account number assigned to tax-deductors.
• Even if they have a PAN, taxpayers who are responsible for TDS deduction must have a TAN. Moreover, only in the case of the sale or acquisition of real estate is a TAN required. The payment of TDS can be made using one's PAN.

TDS Rate Chart for FY 2021-22

Following is a chart of TDS Rate Chart for FY 2021-22:

TDS Filing Due Dates for AY 2021-22

Following is TDS Filing Due Dates Chart for AY 2021-22:

Online TDS Payment Advantages

The following are some of the benefits of paying TDS challans online:

• You will receive immediate payment confirmation.
• The use of a tangible challan is not required.
• You can pay TDS online on behalf of others or your firm online.
• The online option allows you to pay TDS online whenever and wherever you want.
• Your e-challan is directly delivered to the Internal Revenue Service.

Frequently Asked Questions (FAQs)

We have covered common frequently asked questions (FAQs) related to online TDS payment. Let’s check:

1. What is the purpose of TDS?

The purpose of this clause in the Income Tax Act of 1961 is to prevent or reduce tax evasion. Moreover, it is paid directly to the regulating body.

2. What is the procedure for obtaining my TDS account number?

The Income Tax Department will supply you with a Tax Deduction Account Number. Every person that deducts TDS is required to obtain a TAN.

3. Is it possible to pay TDS online with a credit card?

Yes. Select 'Credit card' as a payment method when prompted. Next, you will receive an acknowledgment slip for the transaction as soon as it is completed.

4. Is a TDS certificate required?

It is necessary to issue the certificate in the case of taxpayers.

5. What if I forget to file my TDS returns before the deadline?

You can still pay the delayed TDS if you missed the deadline by following the same processes as paying TDS online. However, you will be charged either 1% or 1.5 percent interest each month on the outstanding balance.

6. How can you make a challan with Nil TDS?

In the amount column, the deductor must enter "Zero" and leave the Cheque/DD number field blank.

7. What can you do if you don't get your TDS refund?

TDS refunds are processed instantly and refunded to your account.

However, if the TDS is not recoverable for any reason. Then, the status of the refund can be checked online by entering the PAN and the A.Y. on the Income Tax Department's e-filing website. Some of the cases are mentioned below if your TDS return is delayed:

• When returns are physically filed.
• When electronic returns are filed but the ITR-5 is not received on time.
• When a bank account number or address is given that is inaccurate.

However, in the first two circumstances, you will have to wait. In the latter scenario, you must contact your Assessing Officer and request that the information be corrected.

8. Is it possible to view the TDS tax challans that have been paid online?

Yes, you can check the status of your challan by going to TIN-NSDL. Moreover, a taxpayer can track their challan deposits and also can confirm the details of their tax-related payment.

9. What if I made a TDS payment and accidentally quoted the wrong TAN?

Because clerical errors might occur during payment, the tax agency allows adjustments to be submitted in Challan. Traces can be used to make corrections in Challan.

10. Is Form 26AS available for download from the TRACES website?

Yes, it is correct. To use the e-filing website, enter your company's incorporation date, date of birth, password, and user ID. From the drop-down menu under 'My Account,' select 'View Form 26AS.' To learn more about it, simply click on it.

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Do not forget to check out our articles on running payroll for India and best practices in HR.

Key Takeaways

We have summarised crucial points for your reference. Check out:

• Tax deduction at source or TDS is the tax amount deducted at the source of income.
• TDS can be deposited in one of two ways: offline TDS or online TDS (e-TDS).
• TDS must be deposited by any individual or business to the Central Income Tax Department by using TDS Challan 281.
• Online TDS payments can be made online at the NSDL's official website
• The user must have a valid TAN and be enrolled in e-Filing in order to upload TDS.
• You will be charged either 1% or 1.5 percent interest each month on the outstanding balance
• PAN and TAN are different from each other. The former is Permanent Account Number, a 10-digit identification number assigned to taxpayers. And, the latter is a Tax Deduction Account number assigned to tax-deductors

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