How to Pay TDS Online?
To begin with, what is TDS? TDS stands for Tax Deduction at Source. It simply means that the government mitigates the risk of tax default by taxing right at the origin point of the income or transaction instead of collecting the tax later.The major benefit that the government reaps from TDS is that the tax revenue continues to flow without any breaks.
How is TDS collected?
For a person to earn income, someone has to pay that. The person who is paying is responsible for deducting the TDS. This means that TDS deduction takes place at the very source where the income is generated. The person who deducts the TDS is called deductor. It is the responsibility of the deductor to deposit the collected TDS to the department of Income Tax. The deposit is made on behalf of the person from whose income the TDS has been deducted (generally known as the deductee). When the deductee’s tax assessment is done at the end of the fiscal year, the TDS is considered as income tax.
What is TAN?
TAN stands for Tax Deduction and Collection Account Number. A person who deducts or collects TDS at the source of the income needs to have this account. Let us put it in this way. Actually it is the duty of the Income Tax Department to collect TDS. But it is literally not possible for the department to collect TDS from every single earning individual in the country. Hence, someone else is given the responsibility of collecting TDS on behalf of the Income Tax department. The people who will collect the tax on behalf of the Income Tax department needs to have some identification. That is why they need to have a TAN. This TAN is an alphanumeric number containing 10 digits. It has to be registered.
What types of incomes call for TDS deduction?
There are different types of income where TDS will be deducted. Here is a list of all those income sources and their corresponding sections in the Income Tax Act:
|Income Tax Act Section||Type of income|
|192||Salary as well as any positive incomes that fall under any ‘head’ listed on income.|
|193||Interest that is earned on securities.|
|194A||Any interest that is earned apart from interest that is earned on securities.|
|194C||Payments that are made to contractors or even subcontractors.|
|194B||Winnings that are earned from crossword puzzles or lotteries.|
|194BB||Winning that are earned from horse races.|
|194D||Commissions earned by insurance agents.|
|194E||Payments made to sports associations or sportsmen who are non-residents.|
|194EE||Payments that are made in respect of the deposits that have been made under the National Savings Scheme.|
|194F||Payments that are made after repurchase of the units by UTI or mutual fund.|
|194G||Commission that are earned from lottery tickets sale.|
|194H||Brokerage payments or commission payments.|
|194I||Payment of rents if the rent amount exceeds INR 1,80,000.|
|194J||Professional services or technical services fee.|
|194L||Payments made as compensation on assets.|
|194LA||Payment made as compensation when a certain immovable property is acquired.|
|194LAA||Payment made when a certain immovable property is transferred. This immovable property cannot be an agricultural land.|
|194LB||Interest income payment from Infrastructure Debt Fund.|
|195||Payments that are made to non-Indian companies and non-residents.|
|196B||Income that comes from purchase of units using foreign currency. If such units that have been purchased in foreign currency are transferred, giving rise to long term capital gains, TDS is deducted.|
|196C||Income that comes from Indian company shares or foreign currency bonds.|
|196D||Income generated from securities for the foreign institutional investors.|
How to Pay TDS Online?
Now that we have more or less a solid working knowledge of TDS, let us look at how to pay TDS online. Remember we said that whoever is depositing TDS to the Income Tax Department is required to have a TAN? It may happen that you earn income and you yourself decide to pay TDS. In case you don’t have a TAN, you need to apply for TAN.
Assuming that you already have TAN, here are the steps that you need to follow in order to pay TDS online:
Step 1: Visit this link. This is from where you need to pay TDS online.
Step 2: On this page, you need to select the appropriate challan number. Select the one that reads ‘Challan No./ITNS 281’.
Step 3. A form will open where you will have to provide your TAN number. The authorities will check for the TAN validity based on what you provide.
Step 4: In case the TAN turns out to be valid, other fillable parts of the form will be activated.
Step 5: Fill up all fields properly and recheck all information at least two or three times.
Step 6: Enter the captcha and then submit the details Captcha is the distorted image you see at the bottom of the page. You need to read whatever is written on that image and fill the same in the captcha field.
Step 7: Once you submit the details, the page will then redirect to the net-banking page. The net-banking page you see will be the page of the bank you select in the challan. For example, if you select Allahabad Bank, you will see the net-banking page of Allahabad bank only and not of SBI.
Step 8: Enter you net-banking details and make the payment.
Step 9: Once the payment is successfully made, you will see a counterfoil displayed on your screen. This counterfoil is a proof that you have made the payment. It will contain all payment details including the CIN or challan identification number.
Step 10: A week after the payment has been made, go to NSDL-TIN website and find the challan status inquiry option. In case you cannot find the option, here is the direct link. Enter the CIN and you will get the status of your challan.
That’s all! There is nothing more. That’s all you need to do to pay TDS online. In case of any confusions, drop us a message and we will try to revert back to you as soon as possible.