It is the Duty of the deductor to pay Tax deducted within the prescribed time to the “credit of the Central Government” [Refer section 200].
Points to be considered before making a challan payment:
a. Type of Deductee:
The deductees are of 2 types, namely, “Companies” and “Other than Companies”. Use separate challans for depositing tax deducted at source from company deductees and from non-company deductees [Refer to the instruction in ITNS 281 Challan].
b. Type of payment/section:
Separate Payments {Challans) should be made for each Nature (Type) of Payment. [Refer to the instruction in ITNS 281 Challan].
c. Due date for payment: [Refer Rule 30]
- Government: Same day when it has been deducted.
- Non-Government: Within next month 7th, from the date of deduction.
d. Interest Applicability:
- If the Deduction has been delayed from the date on which it was supposed to be deducted, then Interest would be payable at 1% per month to the date when it is being paid. [Refer Section 201(1A)]
- If the payment is being delayed from the due date, then Interest would be payable at 1.5% per month on the date when it is being paid. [Refer Section 201(1A)]
Steps to make a payment:
- Accumulate the total of deducted TDS amount and split it according to “Type of Deductee” and “Type of payment”.
- Calculate interest [if any] with respect to the applicability of interest.
- Prepare the Challan ITNS 281, as per the splits available in Point no 1.
- Do not make any mistake. Particularly in mentioning TAN. Quoting false TAN may attract a penalty of Rs. 10,000/- as per section 272BB. [Consequence of wrong TAN]
- Deposit the amount via E-payment or cash at mentioned bank along with ITNS-281.
- Collect the Counter Foil for payment, which contains the unique “Challan Identification number Information (CIN)”
Note:
- E-Payment: The challans can also be paid through e-Payment. This can be made by visiting tin-nsdl website and going to “e-Payment of Taxes Online”
- From 01/04/2008, It is mandatory for deductors liable for audit under section44AB in preceding FY to make all tax payments through e-Payment compulsorily.
- Government deductors can make the payment through Transfer Voucher to the treasury.
