How to make the TDS Payment Online: A Step by Step Guide

In this blog, we will take an in-depth understanding of how to make TDS payments online.

What is TDS?

TDS or Tax Deduction at Source is the specific amount deducted by a person (deductor) when a certain payment, like salary, commission, rent, interest, professional fees, etc., exceeds certain threshold limits. To whom this specific payment has been made (deductee) is liable to pay the tax. The deductor deducts the tax at the source and then pays the remaining to the deductee.
The deducted TDS amount will be remitted to the government. Deductee can check the Deducted (TDS) amount at source in Form 26AS or the TDS Certificate issued by the deductor. Income Tax Department decides the rate of TDS.
This tax deduction at source is made to check tax evasion. Additionally, taxpayers are not required to pay a lump sum as annual tax at the end of the financial year.
Note:- Deduction of TDS doesn’t exempt you from the requirement of filing ITR. If your income exceeds the basic exemption limit, then irrespective of whether TDS has been deducted or not, you have to file ITR.

Consider this example for a better understanding.

Suppose Mr. A has won a lottery for an amount of Rs 1,00,000. TDS on the same needs to be deducted at the rate of 30%. In this case, the amount given to Mr. A would be Rs 70,000 (Rs 1,00,000 – 30%) and not 1,00,000. Since the tax has been deducted before rendering the income in the hands of the receiver, it is known as Tax Deduction at Source. If no TDS provisions had been levied, then MR. A would have received Rs 1,00,000 and, later on, paid Rs 30,000 (Rs 1,00,000 * 30%) to the government himself.
The TDS so deducted needs to be deposited by the deductor to the government within the fixed time frame. The TDS payment can be made online or offline.

How to make the TDS payment offline?

For the offline process, deductors need to deposit TDS by submitting the challans physically at the bank branches. Counterfoil will be provided once the challan has been submitted. Counterfoil can be used as proof after being stamped by the bank for the future course of action.

How to make the TDS payment online?

• Search on google for TDS payment online, and you will be shown results as under
• Go to NSDL website for e-payment of taxes. An image as shown under will open up
• Scroll down to find PAY TAXES ONLINE and choose “Click to Pay Tax Online”
• A screen as shown under will appear
• Select the challan in which you are required to make payment.
• You will be directed to the challan page. For challan 281 enter the following details
• Under Tax Applicable select either the company deductees or Non-company deductee. Company deductee needs to be selected if you have deducted TDS on the payment to be made to a corporate.
• In the type of payment, select the category of TDS in which you want to pay TDS i.e. TDS payable by the taxpayer or under Regular assessment.
• Select the Nature of payment like the interest of payment, dividend etc.
• Choose the mode of payment: Net banking/debit card etc
• Enter the Tax deduction Account No. and select the Assessment year
• Mention the address along with the district, state and pin code.
• Enter the Captcha code and click on proceed button.
• After proceed, a confirmation screen will be displayed. If TAN is valid, the full name of the deductor as per the master will be displayed on the confirmation screen.
• After confirmation of the data entered, you will be directed to the net banking site
• Once successful payment is made, a Challan will be displayed containing the detail of payment, CIN, bank name through which payment has been done.

What are the Advantages of Online TDS Payment?

• Feasibility to make payment from anywhere
• There is no time constraint
• No physical visit, hence no pain of standing in queue
• Can pay on behalf of firm, company, and others
• Get immediate acknowledgement of payment
• The e-challan will be sent directly to the Income Tax department

What is the due date for depositing the TDS amount with the government?

After deducting the TDS amount, the deductor is required to deposit this amount with the government within a specified time, which is called making a TDS payment. The due dates for depositing TDS (or making TDS payment) for government assessees and other assessees are as follows:

How to track the status of Online TDS Payment?

To know the TDS payment status online, you can check it through PAN, Form 26AS or through netbanking portal.

Follow the steps to check TDS status by Pan Card

• Visit www.tdscpc.gov.in/app/tapn/tdstcscredit.xhtml or Go to NSDL’s website for e-payment of taxes
• After typing the verification code, proceed.
• Enter the PAN and TAN details.
• Select the financial year as well as the quarter and the type of return.
• Click on 'Go', the TDS status can be checked here.

Follow the steps to check TDS payment status by Form 26as

• Visit https://www.incometax.gov.in/iec/foportal/.
• Register yourself if you do not have credentials
• If you are already a registered user, log in using the credentials.
• Click on 'View Form 26AS' in the' My Account' tab.
• Select 'Year' and 'PDF format.'
• Download the file.
• If the file is password protected and can be accessed by the Date of Birth as per the PAN card.

What is the Penalty for Delayed Payment & Late Return Filing?

Section 201(1A) :- Late deduction or Late payment of TDS

• Late Deduction: In case, TDS has been deducted but not deposited to the government then in that case interest will be levied
  • @1.5% per month or part of a month
  • On the amount of TDS from the date on which TDS was deducted
  • To the date on which TDS was deposited.
• Late Payment: In case, TDS has not been deducted then in that case interest will be levied
  • @1%per month or part of a month
  • On the amount of TDS from the date on which TDS was supposed to be deducted
  • To the date which TDS was deducted.

Section 234E:- Late fee for default in furnishing of TDS/TCS returns within due date
The penalty under this section is Rs. 200 per day. The penalty shall be calculated till the failure continues by the deductor. However, the amount of penalty cannot be more than the amount of TDS for which the return is required to be filed. Let’s say ABC is required to file his TDS return for Q2 (July - September), for which the due date is 31 October, and ABC filed his return for Q2 on the 15th of November. In this case, the total amount of TDS for which the return needs to be filed is Rs. 2,500.

Let us now compute what will be the amount of penalty u/s 234E ?

Section 271H :
Under this section, the Assessing officer can levy a penalty ranging from Rs. 10,000/- to Rs.1,00,000/-. The cases attracting penalty under section 271H includes:

• In case no TDS return has been filed before the expiry of a period of one year from the due date and
• TDS deducted, late filing fees & interest amount has not been deposited to the government.