New Challan Payment Method – IT Act 2025
New TDS/TCS Challan Payment Process Under Income Tax Act, 2025 (ITNS 281N)
In this post, we will discuss the new TDS/TCS challan payment process under the Income Tax Act, 2025, applicable from Tax Year 2026-27 onwards.
From April 1st, 2026, i.e., for Tax year 2026-27, Quarter 1 onwards, TDS/TCS challan payments need to be made under the new method under the Income Tax Act, 2025.
In the new system, the taxpayer must pay TDS/TCS through Challan Form ITNS 281N under the Income Tax Act, 2025. A key change is that challans under the Income Tax Act, 2025, must be filed based on the Tax Year.
ITNS 281N covers the following payments:-
- Tax Deducted at Source (TDS) / Tax Collected at Source (TCS) under the Income‑tax Act
- Outstanding demand related to TDS/TCS
- Appeal fees and Compounding charges
Prerequisites for paying tax
A taxpayer can create a Challan for Tax Payment in Pre-login (before logging in to the e-Filing portal) or post-login (after logging in to the e-Filing portal) mode.
| Option | Prerequisites |
| Pre-Login |
|
| Post-login |
|
Challan generation through Post Login
Step 1: Log in to the e-Filing portal with the user ID (TAN) and password (Deductor Login)
Step 2: On the Dashboard, click e-File > e-Pay Tax. Upon clicking e-Pay Tax, the user will be navigated to the Act Selection screen. Select Income Tax Act, 2025, and click the Continue button. The user will then be navigated to the e-Pay Tax page.
Note: User needs to select Income Tax Act, 2025 for payment of tax from Q1 of Tax Year 2026-27, onwards, i.e., payments to be done in the month of May/2026 for the deduction in the month of April/2026.
For the Taxes that are to be paid for Q4 of FY 2025-26 or before, select Income Tax Act, 1961. This will apply to all taxes that are now being paid for the last Quarter and for those paid before due to delays or corrections.
Step 3: On the e-Pay Tax page, click the New Payment option to create a new Challan Form (CRN).
Step 4: On the New Payment page, select the Tax Year (2026-27) and click Proceed on a tax payment tile that applies to you.
Note: Tiles will be enabled based on the Act selected on the previous screen. 
Overview of the Tiles:
| Tile Name | Major Head | Minor Head | Respective Challans & Usage |
| Pay TDS/TCS | Corporation Tax (0020)/ Income Tax (Other than Companies) (0021) | TDS/TCS Payable by Taxpayer (200) | To make TDS/TCS Payments for TY 2026‑27 & onwards.
Under ‘TDS/TCS Section-Wise Payment Details’ section, Multiple section codes can be selected for the chosen deductee type in a single challan, subject to a maximum of 20 codes. If more than 20 codes are required, an additional challan must be filed.
Challans covered: ITNS 281N |
| Pay Outstanding Demand | Corporation Tax (0020)/ Income Tax (Other than Companies) (0021) | TDS/TCS Regular Assessment (400) | To make Outstanding Demand Payment for TY 2026‑27 & onwards.
Challans covered: ITNS 281N |
| Pay Fee [Other receipt (500)] | Corporation Tax (0020)/ Income Tax (Other than Companies) (0021) | Other Receipts (500) | To make Payment of Appeal Fees and Compounding Charges for TY 2026‑27 & onwards.
Challans covered: ITNS 281N |
| Miscellaneous Receipts | Corporation Tax (0020)/ Income Tax (Other than Companies) (0021) | Other Miscellaneous Receipts (800) | To make Payment of the Application Fee of e-DRS u/s 379 (Form no 119) for TY 2026‑27 & onwards.
Challans covered: ITNS 282N |
Step 5: On the click of the Proceed button on the Pay TDS/TCS tile, the user will be navigated to ‘Select Deductee Type’ screen, where applicable Major head and Residential status of the deductee should be selected.
Step 6: On the click of the Continue button, the user will be taken to the Add Nature of Payment Details screen, where they must enter information in at least one of the two sections as below;
- TDS/TCS Section‑Wise Payment Details, which allows entry of section‑wise Tax, Surcharge, and Education Cess (with each section code selectable only once).
Note:
- Separate challan is required to be filled based on “Deductee type” and “Residential status of Deductee”.
- User can select 20 section codes in one challan
- User is expected to select the description along with Tax details such as Tax, Surcharge & Education cess amount
- Details of Other Payments, where the user can enter Interest, Fee under section 427, Penalty, and Other amounts.
Step 7: On the click of Continue button, the user will be navigated to the ‘Verify Tax Break Up Details’ screen, where all the fields are auto-populated and non-editable.
Step 8: On Click of the continue button, the user will be navigated to the select payment mode page, where the user can select the appropriate payment method for depositing the tax.
On the click of Continue button, the user will be navigated to the Preview and Make Payment page. Here, the user can:
- Preview all the entered details before proceeding with the payment.
- If any corrections are needed, the user can click the “Edit” button to go back and update the information.
- If all details are correct, the user can click the “Pay Now” button, after which they will be redirected to the bank’s payment page to complete the transaction.
For payment through a challan at the Bank counter:
If the user wants to pay the tax at the Bank counter, then select “Pay at Counter” and select the payment type, i.e. Cash/Cheque/DD etc. Next, select the bank from the list where the tax will be paid, then click Continue.
On the Preview and Download Challan Form page, verify the details and tax breakdown, then click Continue. The Challan Form (CRN) will be generated successfully. Print the Challan Form (CRN) and visit any branch of the selected Bank to make the payment.
Note: After successful payment, the user will receive a confirmation email and an SMS on the email ID and Mobile number registered with the e-Filing portal. Once the payment is successful, the Challan Receipt may be downloaded for future reference. The payment details and the Challan Receipt are also available under the Payment History Tab on the e-Pay Tax page post-login.
We hope this post helped you understand the new ITNS 281N challan payment process under the Income Tax Act, 2025. If you have any questions, feel free to share them in the comments below.
