TDS Challan 281 and Consequences in case of delay
A simple guide on TDS challan 281
Hello, in this post we will discuss TDS challan 281and the various consequences for delay payment.
We will cover the following:
What is TDS challan 281?
TDS challan 281 is issued for depositing Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). It was introduced to minimize the errors and facilitate online transmission of details of tax collected, deposited, refunded, etc.
Steps to File TDS Challan 281?
Citizens of India, including corporations and non-corporate entities, can file TDS challan 281.
Would you like to know how to submit your income tax challan 281 online? Please scroll down if so.
In order to submit TDS Challan 281 online, please follow these steps:
- Login to e-Tax Payment System website
- Then select Challan No./ITNS 281
- To proceed, provide the necessary information, such the TAN number, address, payment method, bank name, etc.
- Confirmation screen will display, double-check the information you submitted.
- Simply click “Submit to bank.”
- It will take you to the bank’s online banking page.
- To use net banking, enter the user ID and password issued by the bank.
- Enter the payment details, i.e. the amount to be paid
- Select “Submit”
- A challan counterfoil including the CIN number, payment information, and bank name used to make the e-payment will be displayed upon successful payment.
Likewise, to submit offline please follow these steps:
- Based on the type of payment and deductee, calculate the total TDS payable. in addition, if interest is applicable, you should calculate the rate.
- Download TDS Challan 281 in PDF format.
- Take a print out of the challan.
- Submit the duly filled out form along with the required TDS to your nearest bank.
- After you submit, the bank will provide you with a stamped receipt as payment proof.
Due date for filing TDS Challan 281
When the taxpayer deposits TDS and TCS challan 281 is issued. So, it has to comply with the timelines laid out for deducting and depositing tax.
Due dates for the TDS payments are:
- TDS deducted on payments (for e.g., salary TDS) – 7th of the next month.
- Deduction of TDS on the purchase of property – 30th of the next month.
- TDS deduction in March – 30th April.
Consequences in case of delay
In case of any delay in depositing tax, interest is levied at the rate of 1.5% per month or part of the month from the date of deduction.
For example, If the TDS for the month of October 2018 is deposited on December 15, 2018, then in such case the due date of payment was November 7, 2018, however, since the payment is delayed for 2 months i.e., November as well as December interest at the rate of 3%, will be payable.
How to check the challan status online
On the website of Tax Information Network, the online status of challans deposited can be viewed. Banks and tax payers can both conduct the inquiry.
According to the type of view, the tax payer must submit the information listed below:
- CIN Based view:
- BSR Code of collecting branch
- Challan Tender Date (Cheque/Cash deposit date)
- Challan Serial No.
2. TAN based view:
- Tax Deduction/ Collection Account No. (TAN)
- Challan Tender Date/ Date of Deposit (Period)
The collecting branch must enter the information listed below:
- OLTAS user id and password
- Branch scroll Date
- Major Head code Description
The Nodal branch must enter the information listed below:
- OLTAS user ID and password
- Nodal scroll date
- Major Head code Description
Details which are required to be filled
- Tax Applicability: It is the first column of the form.
- 0020: This is applicable in the case of the income tax of companies. If the deductee is a company such as ABC Ltd. then you need to select code 0020. Whether or not an entity is a company can be checked by the PAN no. of the entity, the fourth letter of the PAN No. shall be “C” in the case of a company.
- 0021: This is applicable to income tax for other than companies, i.e., if the deductee is not a company, it may be an individual, HUF, partnership firm, etc.; then you need to select this code.
- Assessment year: It is the year in which you need to pay the tax regarding the income earned during the previous year.
- TAN, name and address: You have to enter the TAN no. and the name of your company.
- Type of payment: It relates to the TDS payment category.
- If the taxpayer pays the tax on a monthly basis on his own, then tick on “TDS / TCS payable by the taxpayer”.
- If the tax is paid by the taxpayer based on the demand raised by the Income Tax Department, then tick on “TDS/TCS Regular Assessment (Raised by IT Department)”
- Nature of Payment: Code as per the section under which TDS / TCS is deducted is to be filled in here.
Penalties for late TDS payments
There are penalties in the form of additional interest payments for late TDS payments and TDS return filing. The type of delay affects the rate of this interest payment
- Delay in TDS deduction – 1% of the TDS per month or part thereof
- Delay in depositing the deducted TDS – 1.5% of the TDS per month or part thereof
- Hold up in TDS return filing – Rs 200/day subject to a maximum of the actual TDS amount. Moreover, if the delay is for a year and above, the penalty might range between Rs. 10,000 to Rs 1 lakh.
This ends the post on the TDS challan 281. Let us know your opinion by commenting below.