TDS Online Payment

Tax Deducted at Source, or TDS, is the kind of tax collected at the point of origin of income as per the Income Tax Act, 1961. The deductor (individual, organization, or institution) must withhold an amount equal to the tax amount from the total earnings payable to the receiver/deductee. The deductor is responsible for deducting the tax correctly and then depositing it with the concerned authorities within the stipulated time period.

Applicability of TDS 

It is commonly assumed that the TDS is applicable only on your salary income, but it is also applicable in many other cases. Here’s the list of cases where TDS applies:

• Income from interest on securities and debentures

• Income from dividends

• Income from interest other than that on securities

• Income from the withdrawal of EPF 

• Payment to contractors/subcontractors/freelancers

• Winnings from lotteries, horse races, crossword puzzles, or any other such games.

• Insurance commission and commission on brokerage earnings

• Transfer of immovable property, etc.

• Income from rendering technical/professional services

• Income from royalty.

Benefits of TDS

TDS was introduced to make tax payment easy. The benefits of TDS are mentioned below:

• It prevents tax evasion.

• It acts as a steady source of revenue for the government.

• It ensures the timely collection of tax.

• It offers convenience for taxpayers as the total tax is spread throughout the year.

• It provides ease in filing tax returns as the tax is automatically deducted for the concerned authorities by the deductor.

Importance of TAN for TDS

Tax Deduction and Collection Account Number (TAN) is a ten-digit alphanumeric number issued to individuals/organizations that are required to deduct/collect tax on payments made by them.

• Under Section 203A of the Income Tax Act 1961, it is mandatory for all organizations and individuals to quote TAN details to the Income Tax Department in all matters related to TDS. If you fail to do so, it could attract a penalty of Rs. 10,000/-.

• Banks do not accept TDS returns and payments unless the deductor/depositor has a valid TAN.

Procedure for Online TDS Payment

Online TDS payment is quite simple and user-friendly following the steps mentioned below:

• Visit the Income Tax Department website.  

• Select challan no. ITNS 281. This challan number is to be used to deposit TDS/TCS by a company or non-company deductee.

• Fill in the following details:

  • Type of deductee: If the deductee is a person, then you should select (0021) Non-Company Deductee; else you must select (0020) Company Deductee.

  • Give the nature of the payment.

  • Provide the mode of payment and bank chosen.

  • Enter your TAN. This is for online verification of the validity of your TAN. If the TAN details are not available in the database, you will not be allowed to proceed further.

  • Provide the Assessment Year. The assessment year is the year following the financial year for which the income is evaluated. For instance, if the income is earned between 1 April 2018 and 31 March 2019, the assessment year will be 2019-20.

  • Enter your contact details, such as address, email ID, and phone number.

  • Enter the captcha

• Now click on ‘Proceed.’

• After the data is submitted, a confirmation screen will be displayed.

• After checking thoroughly that the data in the challan is correctly entered, click on ‘Confirm.’

• Post confirmation, the page will be redirected to your bank’s net-banking page.

• Log in to your net-banking account using your credentials.

• Upon successful payment, the system displays a challan counterfoil.

• The challan contains:

  • Challan Identification Number (CIN) that shows the payment details

  • The name of the bank through which the payment was made

  • Bank Branch Code (BSR)

  • Date of tender of the challan.

TDS Certificate

After TDS is deposited with the Income Tax Department, under Section 203, the deductor must issue a TDS Certificate to the person on behalf of whom the tax payment was made.

TDS Certificate/Form 16/Form 16A must be issued on an annual/quarterly basis.

How to Check TDS Payment Status?

You can check your TDS payment status online through the Centralized Processing Cell portal. Here’s how you do it :

• Visit the TDS CPC website.

• Enter the captcha code and click on ‘Proceed.’

• Enter details such as PAN, TAN, financial year, quarter, and type of return; then click on ‘Go.’

• TDS credit will be displayed on the screen.

Due Dates to File TDS Returns for FY 2019-20 

TDS must be filed quarterly. The table below provides the months constituting each quarter and the last dates to file the return:

Quarter	Due date
April, May, June	July 31
July, August, September	October 31
October, November, December	January 31
January, February, March	May 31

If you delay filing these returns or make errors while filing the same, you are imposed with certain charges, which can be in either of the two forms given below:

• Penalty

• Interest

Penalty

If the TDS returns are filed after the due date, or there are discrepancies in the return forms, the following penalties will be applicable:

• Penalty under Section 234E: If you fail to file your returns on or before the due date, you will be subjected to a late filing fee of Rs.200 per day. This fee is charged on a daily basis after the due date, up until your return is filed. However, the maximum fees that you have to pay will not exceed your TDS amount.

For instance, if an amount of Rs. 8000/- is due as TDS on May 12, and the amount is paid on November 17, the total number of days between the aforementioned dates is 190. Hence, Rs. 200/- per day for 190 days will amount to  Rs.38,000/-; but, since the payable TDS amount is Rs. 8000/-, your late filing fees will be Rs.8000/-. However, you will be charged with interest.

• Penalty under Section 271H: If you file the returns with wrong details, such as incorrect PAN, incorrect tax amount, etc., a penalty of Rs.10,000-Rs.1 lakh is levied. 

The penalty under Section 271H will not be charged under the following conditions:

• If you file the TDS/TCS return prior to the expiry of 1 year from the due date.

• The TDS/TCS is paid to the government’s credit.

• The interest and late filing fees have been paid to the government’s credit.

Interest

Section 201 of the Income Tax Act, 1961, provides the consequences of failure to deduct/pay TDS. Under sub section 1A of Section 201, interest on late payment of TDS is given. Section 201(1A) provides the interest rates applicable for the following two situations:

Situation	Interest Rate	Period of Interest
Delay in deduction of TDS	1% per month	From the month in which TDS was deductible till the date of deduction
Delay in payment of TDS	1.5% per month	From the month in which TDS was deducted till the date of payment of tax

Example for situation 1:

Say the payable TDS amount of an individual is Rs. 8000/- . If the date on which TDS must be deducted was January 10, but it was deducted on May 14, the interest charged on the individual will be 1% of Rs.8000 per month × 5 months = Rs. 400/-.

Example for situation 2:

Say the payable TDS amount of an individual is Rs. 8000/- . If the date on which it was deducted was January 10, and TDS was paid on May 14, the interest charged to the individual will be 1.5% of Rs.8000 × 5 months = Rs. 600/-.

Helpline 

If you face any problem at the time of online payment through the NSDL website, you can contact:

• TIN Call Centre: 020 – 27218080

• Email id: [email protected]