The Indian Income Tax Act determines how much an individual owes the State as tax liability. This amount is decided based on several factors such as age, source of income, and income earned in the last fiscal year. The total annual income of a person is then scrutinized and a certain percentage of it becomes that person’s tax liability. Afterwards, the individual can rely on several different ways to discharge this liability, such as Advance tax, self-assessment tax and TDS/TCS.
What is TDS?
Tax Deducted at Source, better known as TDS is a way of collecting tax as per the Income Tax Act, 1961. As per this method, the tax that an individual is liable to pay is deducted at his or her income source according to predetermined TDS Rates, and the amount leftover after deduction is paid as the salary by the employer. After collecting the tax of all the employees in this manner, the employer must deposit this amount to the government within a specified period of time.
The fundamental need of such a system is to handle the tax liability at the income source itself, as a way of lessening other compliance measures required. Furthermore, the individual from whose salary the tax has been deducted receives a credit for the sum of money deducted, through Form 26 AS or the TDS certificate issued, making TDS, an indirect method of collecting tax.
What is the applicability of TDS?
Here’s a look at all the incomes for which the online payment of TDS is acceptable and eligible:
- Security Interests
- Winnings from lotteries/races/bets
- Commission from Insurance/lottery ticket sale/brokerage
- Immovable property transfer
- Fees for professional or technical services
TDS Payment Online – Procedure
Here’s a look at how you can do the online payment of TDS. The most common methods are online payment of TDS and the physical payment of the TDS.
Electronic Mode or e-payment of TDS is necessary for all the corporate assets owned by a taxpayer, and also for assets which fall under Section 44 AB of the Income Tax Act. In order to do the online payment of TDS, here are the prerequisites needed:
- Deductor must have a net-banking facility activated on their account
- Must have a debit/credit card issued by an authorised bank
- The PAN/TAN number must be linked to the bank account
To pay TDS via the physical mode, the taxpayer must submit challan 281 to an authorized bank after paying the money due from him or her.
Online Payment of TDS
- First and foremost, Login to the official TIN NSDL Portal
- Once you have logged in, from the homepage, go to the Challans Tab
- From the drop-down menu that lists various challans, choose the appropriate one, that is, Challan ITNS 281
- Once you have selected the right challan, proceed to fill in all the details asked for.
- Make sure you opt for (0020) if you are working for a company and (0021) if not.
- After that, choose the right mode of payment. In case you are paying the TDS yourself, opt for (200), and if the payment is as an outcome of assessment done by the IT department, choose (400).
- Next, check all the rates and nature of payments you have chosen.
- Select the right mode of payment, that is, Net Banking/Debit card.
- In the new dialogue box, enter your TAN details for verification purposes and also the assessment year for which you want to pay the tax.
- Finally, fill up the rest of the form, enter the Captcha and then click on Submit.
- Now your screen will display your Challan details. Go through them carefully, and if everything is right, click on Confirm to proceed.
- You will then be redirected to the payment portal.
- Complete the transaction process to successfully make your online payment of TDS.
- Once the payment is successful, you will receive a Challan Identification Number which may be used for future references.
How to Track Online TDS Payment?
After making the payment, you can track your challan status online through the webpage. Visit the NSDL portal and log into your account. From the homepage, go to the Challan Status Inquiry tab. You can start tracking your challan seven days after having made the payment. Also, you can make use of two methods to track your challan online. You can opt to enter your CIN and details such as bank code to see the status of your challan. This will bring up details such as date of deposit, TAN number and date of receipt. The other method to track your challan involves providing your TAN and payment date. This will provide you with details such as CIN, payment nature, and date of receipt.