Tax Deducted at Source (TDS) is an important part of the Indian taxation system, ensuring tax collection at the time of income payment. Whether you are an employer, contractor, or professional, you must understand how to pay TDS challan and how to file TDS return online to stay compliant.
What is TDS?
TDS (Tax Deducted at Source) is a system introduced by the Income Tax Department of India to collect tax at the source of income. Under this system, a person (deductor) responsible for making payments such as salary, rent, professional fees, interest, or contract payments deducts a percentage of tax before paying the recipient (deductee). The deducted tax is then deposited with the government.
Why is TDS Important?
- Ensures regular tax collection and prevents tax evasion.
- Reduces the tax burden at the end of the financial year.
- Helps the government receive revenue throughout the year.
- The deducted TDS is reflected in Form 26AS, allowing taxpayers to adjust it against their final tax liability.
TDS is applicable to various payments under the Income Tax Act and must be deposited using a TDS challan before filing the TDS return online.
What is TDS Challan?
A TDS challan is a tax payment form used to deposit TDS with the government. The most commonly used challan is Challan ITNS 281 for TDS payments.
How to pay TDS Challan?
TDS can be paid online through the Income Tax e-Filing portal or offline via authorized bank branches. Below is the step-by-step process for both methods:
Online Method for TDS Payment
Step 1: Visit the Income Tax e-Filing Portal
Go to the official Income Tax e-filing portal to login.
Step 2: Log in to Your Account
- Enter your credentials to login.
- If you don’t have an account, register using your TAN (Tax Deduction and Collection Account Number).
Step 3: Navigate to the e-Pay Tax Section
- After logging in, go to “e-File” > “e-Pay Tax“.
- Click on “Proceed” under the New Payment tab.
Step 4: Select the Correct Tax Payment Option
- Choose “TDS/TCS” as the tax payment category.
- Click on Proceed and select Challan ITNS 281 (for TDS payments).
Step 5: Fill in the Required Details
Enter the following details:
- TAN (Tax Deduction and Collection Account Number)
- Assessment year (Select the financial year for which TDS is being paid)
- Type of payment (TDS on Salary, Non-Salary, etc.)
- Nature of payment (Choose the correct section, e.g., 192 for salary, 194C for contractor payments, etc.)
Step 6: Select Payment Mode
You can pay via:
- Net Banking
- Debit Card
- UPI
- Credit Card (if available)
- RTGS/NEFT (for large payments)
Step 7: Complete the Payment
- Verify all details and click “Continue”.
- Proceed with the payment through your selected mode.
Step 8: Download the Challan Receipt
- After successful payment, you will receive a Challan Identification Number (CIN).
- Download and save the challan receipt for future reference.
- This CIN is required for filing TDS returns.
Offline Method for TDS Payment
If you prefer to make the TDS payment manually, follow these steps:
Step 1: Download the Challan Form
- Visit the Income Tax Department website and download Challan ITNS 281.
Step 2: Fill in the Challan
- Enter details such as TAN, assessment year, nature of payment, and amount.
Step 3: Visit an Authorized Bank Branch
- Go to a designated bank (like SBI, HDFC, ICICI, PNB, etc.).
- Submit the filled Challan ITNS 281 along with cash, cheque, or demand draft.
Step 4: Collect the Acknowledgment Receipt
- The bank will process the payment and provide a stamped challan receipt as proof of payment.
Other Methods for TDS Payment
1. RTGS/NEFT Payment
For large TDS payments, businesses can use RTGS/NEFT:
- Generate a Unique Transaction Reference (UTR) number from your bank.
- Fill in Challan ITNS 281.
- Use RTGS/NEFT transfer via your bank.
- The bank will issue an electronic receipt for confirmation.
2. Corporate Net Banking
- Many banks offer corporate tax payment services for businesses.
- Log in to your corporate banking portal, select TDS payment, enter details, and pay.
TDS Payment Due Date
The TDS payment due date varies based on the deductor type:
- Government deductors: On the same day of deduction
- Non-government deductors: By the 7th of the following month
- For March deductions: By April 30th
How to Check TDS Challan Status Online?
After making the payment, check the TDS challan status online:
Step 1: Visit the Income Tax e-Filing Website
- Go to the official Income Tax e-filing website.
Step 2: Click on ‘e-Pay Tax’
- On the homepage, click on “e-Pay Tax”.
Step 3: Enter TAN and Assessment Year
- Select “Proceed with TAN”
- Enter your TAN (Tax Deduction and Collection Account Number) and Assessment year
- Click “Continue”
Step 4: View TDS Payment Status
- You will see a list of challans paid along with their Challan Identification Number (CIN).
- If the status is “Paid”, it means the payment has been successfully processed.
Once you have paid TDS challan, the next crucial step is to file the TDS return. Simply paying TDS is not enough, you must report the details of the tax deducted and deposited to the Income Tax Department.
What is TDS Return?
A TDS return is a quarterly statement that TDS deductors (such as employers, businesses, and organizations) must file with the Income Tax Department.
Filing a TDS return ensures that the deducted tax is recorded and reflects in the taxpayer’s Form 26AS, allowing them to claim credit for the tax paid.
How to File TDS Return Online
Step 1: Log in to the Income Tax e-Filing Portal
- Click “Login” and enter your TAN, password, and CAPTCHA.
- Select “e-File” > “Income Tax Forms” > “Upload TDS”.
Step 2: Upload TDS Return File
- Choose the correct form type (24Q, 26Q, 27Q, or 27EQ).
- Select the financial year and quarter for which you are filing the return.
- Upload the TDS statement in ZIP file format.
- Attach the digital signature certificate (DSC) (if required).
Step 3: Submit and Verify
- After uploading, click “Submit”.
- You will receive an acknowledgment number for tracking.
How to Check TDS Return Status?
1. Visit the TIN-NSDL Website
Go to the TIN-NSDL website.
2. Select the Option to Track TDS Return
Click on “Track TDS/TCS Statement Status”.
3. Enter the Acknowledgment Number
Provide the 15-digit acknowledgment number received after filing the TDS return.
4. Enter the Captcha Code
Type the displayed security code to verify the request.
5. Click on “Submit”
The system will process your request and display the TDS return status.
Forms for TDS Return Filing
Different TDS return forms are used based on the type of payment. Below are the common forms:
| Form | Purpose |
|---|---|
| Form 24Q | TDS on Salaries |
| Form 26Q | TDS on Non-Salary Payments |
| Form 27Q | TDS for Non-Residents (NRI Payments) |
| Form 27EQ | Tax Collected at Source (TCS) |
TDS Return Due Dates
| Sr. No. | Quarter | Period | TDS Return Filing Due Date |
|---|---|---|---|
| 1 | Q1 | April - June | 31st July |
| 2 | Q2 | July - September | 31st October |
| 3 | Q3 | October - December | 31st January |
| 4 | Q4 | January - March | 31st May |
Penalty for Late Filing of TDS Return
Failure to file a TDS return on time results in penalties:
Late Filing Fee (Section 234E)
- ₹200 per day until the return is filed.
- Maximum penalty = Total TDS deducted.
Penalty for Non-Filing (Section 271H)
- ₹10,000 to ₹1,00,000 if not filed within one year.
Interest for Late Payment (Section 201)
- 1% per month if TDS is not deducted on time.
- 1.5% per month if deducted but not deposited.
Conclusion
Timely TDS challan payment and TDS return filing are crucial for tax compliance. By staying updated on TDS return due dates, deduction rates, and required forms, taxpayers can avoid penalties and legal complications.
If you need assistance with TDS payment and filing TDS returns, EasetoCompliance offers expert compliance services. Contact us for hassle-free tax solutions.
Frequently Asked Questions (FAQs)
Q1. How to check TDS details using a PAN card?
Log in to the TRACES portal, navigate to TDS/TCS credit, enter your PAN and assessment year, and view the details.
Q2. What is a reversed TDS return?
A reversed TDS return occurs when a filed TDS return is rejected due to errors like incorrect PAN details, mismatched challan details, or invalid deductions.
Q3. What happens if I don’t pay TDS on time?
A late TDS payment attracts interest at 1.5% per month, and failure to file TDS returns leads to penalties up to Rs. 1,00,000.
