Challan ITNS 281: How Employers Pay TDS to the Government
Employers utilise TDS Challan 281 to submit tax deducted at source (TDS) on employee salaries to the government. It is used when an employer pays the government's TDS on an employee's salary. The Income Tax Department issues this challan form. In this article, we will explain how ITNS 281 is used by employers to deposit TDS to the government.
Table of content
What is TDS Challan 281?
In India, the TDS Challan 281 form is utilised to pay the government for Tax Deducted at Source (TDS). Under the TDS system, people or organisations who pay particular amounts (such as salaries, interest, rent, or professional fees) have a portion of the money taken out as taxes, which they then send to the government. In India, the Income Tax Act, 1961 governs the TDS regulations. The OLTAS income tax payment system has been replaced with the e-filing portal's "e-Pay Tax" feature. Challan 281 is therefore no longer required or relevant.
The Inception of ITNS 281
Everything is being updated to fulfil the needs of a generation that is driven by technology with the introduction of new technologies and electronic media. Consequently, procedures such as paying taxes and filing returns are also being modified. The Income Tax Department likewise started implementing similar measures in 2004. The result was the implementation of an Online Tax Accounting System (OLTAS) for direct taxes. The purpose of introducing this technology was to decrease errors and human intervention in the process. Additionally, the system allows the user to view the real-time status of their requests. Users can choose from a variety of formats or options based on what they need. TDS Challan ITNS 281 is one of the forms that can be seen on the OLTAS.
In the OLTAS system, a single copy of the challan is issued with a tear-off strip for the taxpayer, as opposed to the former method when three copies of the challan were issued. The Income Tax Department has developed three sorts of challans, which are as follows:
Challan No. ITNS 280 is used to pay income taxes, which can be paid by advance tax, regular assessment tax, self-assessment tax, tax on dispersed profits, or income. You can pay your taxes online or at different bank branches using a check, money order, etc. Regardless of the payment method, Challan ITNS 280 must be utilised.
The Challan Number ITNS 281 is utilised for the deposit of either Tax Collected at Source (TCS) or Tax Deducted at Source (TDS).
To pay the gift tax, wealth tax, expenditure tax, estate duty, securities transaction tax, and other direct taxes, utilise Challan No. ITNS 282.
Compliance Requirements for ITNS 281
The taxpayer deposits TDS and TCS, at which point Challan ITNS 281 is generated. As a result, it must adhere to the deadlines set forth for tax deductions and deposits. Deadlines for TDS payment are as follows:
TDS for payments (not including real estate purchases) will be on the seventh of the next month.
TDS deducted at the time of property purchase will be on the 30th day of the following month.
30 April is the due date when TDS was deducted in the month of March.
Interest is charged at the rate of 1.5% per month, or a portion of the month, from the date of deduction if the tax is not deposited on time.
Steps to File Challan ITNS 281 Online
Visit the tin-nsdl website and choose ITNS 281 for Challan No. Fill out Challan ITNS 281 with the following information at the time of tax payment.
Deductee: Choose the right deductee, or the person from whose account the money has been withheld. Two choices are available: company deductees (0020) and non-company deductees (0021).
Assessment Year: The applicable AY for which the payment is being made is the Assessment Year (AY). For instance, the applicable AY will be 2018–19 if the payment is made on June 30, 2017 (pertaining to FY 2017–18).
TAN: A 10-digit alphanumeric number known as a TAN is given to those who are obligated to withhold or collect taxes.
Payment Method: 200 should be chosen if the transaction type is normal TDS/TCS. If the payment is being made in response to a demand made by the income tax authorities, 400 should be chosen.
Nature of Payment: You must choose from the drop-down list the part from which TDS/TCS has been deducted.
Payment Specifics: Add the income tax, surcharge, and, if necessary, the late filing fees. must be entered in addition to the bank branch and date.
Once all the information has been entered, click "submit to bank." Your bank's portal will then open, allowing you to complete the payment. Following successful transaction processing, a challan counterfoil with the CIN number, payment information, and the name of the bank used to make the electronic payment will be shown.
Steps to File Challan ITNS 281 Offline
To complete and submit TDS ITNS challan 281 offline, you must adhere to the detailed procedure listed below:
Deductors must choose and complete the relevant challan, challan number 281, with all necessary data.
Deliver the Challan, the required payment amount, and the Challan's counterfoil to the bank. You have two options for payment: cash or cheque.
The Counterfoil is crucial because, once the bank has stamped it, it will serve as documentation of the challan's acceptance and payment. You can utilise this counterfoil for any necessary future action.
How to Check the Status of Challan ITNS 281 Online
The tin-nsdl portal allows taxpayers to view the status of their Challan online. To view the status, choose one of two modes: CIN-based and TAN-based view.
Enter these details from your challan to view the status using the CIN-based mode:
BSR code
Date of Challan
Serial number of Challan
Quantity
Enter the information from your challan below to view the status in TAN-based mode:
Date of Challan
Conclusion
A number of crucial factors must be taken into account while filing TDS Challan 281 to guarantee correct and legal tax deduction at source. Furthermore, it is essential to accurately and timely file TDS returns following the TDS deposit using Challan 281. Details of TDS deductions and payments made to the tax authorities are provided in TDS returns. Consider consulting a tax expert or consultant if you have any questions regarding TDS provisions, rates, or any other area of TDS compliance to guarantee correct and compliant TDS deduction and reporting. Provisions pertaining to TDS and tax legislation may vary over time. To guarantee continued adherence to existing regulations, keep up with updates and modifications.
FAQ
Q1. What is the type of payment in Challan 281?
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) deposits are made using Challan No. ITNS 281.
Q2. What does ITNS mean in income tax?
The Income Tax New Series, or ITNS, is a form that makes it easier for both business and individual taxpayers to pay their income taxes.
Q3. Is TDS challan 281 applicable now?
No, it is no longer applicable now as it has been migrated to the e-filing portal.
Q4. When should I deposit the TDS payment online?
TDS on long-term capital gains is to be deducted at 20% plus any applicable surcharge (plus surcharge and cess if applicable) if both the seller and the buyer of real estate are NRIs. TDS, not capital gain, should ideally be subtracted from the sale consideration. Therefore, it is necessary to get a certificate from the income tax officer stating that TDS is to be deducted on LTCG rather than on sale consideration. Challan No. ITNS 281 must be used to deposit the TDS that has been thus deducted.
Q5. What are the penalties for late TDS payments?
Penalties in the form of additional interest payments are imposed for late TDS payments and returns filing.
Delay in TDS deduction: 1% of monthly TDS, or a portion of it
Delay in depositing TDS: 1.5% of the whole monthly tax, or a portion of it
There is a Rs 200/day late fee for filing a TDS return, up to the whole amount of TDS that is due. Furthermore, the penalty may vary from Rs. 10,000 to Rs. 1 lakh if the delay lasts more than a year.
Q6. How do salaried individuals know about their TDS Challan details?
If you are paid on a salary, you can request a TDS Challan certificate from your employer. In alternative circumstances, you might go to the Department of Income Tax's website. After selecting "View Your Tax Credit," look over Form 26AS.
Q7. If an employer or payer fails to pay TDS, how does it affect an employee?
You as an employee won't be penalised if your company doesn't pay the TDS challan. The onus of paying the TDS challan on time rests solely on your payer or employer. On the other hand, you pay your taxes when you file your yearly returns. You will still be able to pay taxes even if your employer doesn't pay the TDS challan.
Q8. Can I make multiple payments using a single Challan ITNS 281?
No, each Challan ITNS 281 is valid for a single tax payment. If you need to make multiple payments, you must fill out separate challans for each transaction.
Q9. Is it mandatory to submit a physical copy of Challan ITNS 281 to the bank?
No, most banks now accept electronic payments without requiring a physical challan. However, it's best to check with your bank about their specific requirements.
Q10. Can I use Challan ITNS 281 to make advance tax payments?
Yes, you can use Challan ITNS 281 to make advance tax payments throughout the financial year, in addition to making regular tax payments.
Q11. What happens if I make a mistake while filling out Challan ITNS 281?
If you realize there's an error after making the payment, contact your bank immediately to rectify the issue. Depending on the nature of the mistake, you may need to file a revised challan.
Q12. Can I use Challan ITNS 281 to pay taxes for multiple assessment years?
No, each Challan ITNS 281 is specific to a single assessment year. If you have tax dues for multiple years, you must fill out separate challans for each year.
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