TDS Challan 281 is an official document through which businesses deposit TDS (Tax deducted at source) and TCS (Tax collected at source) to the Central Income Tax Department.
In this blog, we decode everything about Challan 281. Read on.
What is Challan 281?
By definition, a challan is an official document that acknowledges a payment. In taxation parlance, challans are documents that are proof of a deposit with the Government, most often of tax.
The Income Tax Act 1961 mandates businesses to deduct TDS before an income payment to an individual or entity. For example, if a company makes a contractor payment of Rs 1 lakh they should deduct Rs. 10,000 (10% TDS) before making the full payment and pay net Rs. 90,000.
The TDS deducted here should be deposited to the income tax department through Challan 281 on the behalf of the assessee who earned the income.
OLTAS and Challan 281
Before 2004, businesses had to make TDS payments by physically visiting the bank branches. Apart from the fact that this process was tedious and cumbersome, it also increased the chances of human error. To remove the inefficiencies, the Income Tax Department introduced the Online Tax Accounting System (OLTAS).
How to deposit Challan 281?
Businesses can deposit TDS payments by 2 modes – online and offline mode.
- Visit an authorised bank branch and avail challan 281
- Now, fill in the required details and make the payment
- The executive of the bank would accept the payment and issue a counterfoil of the challan acknowledging the same
- Once the challan is verified, the tax would be deposited to the Income Tax Department
- Visit the official TIN-NSDL website
- On the home page, go to the ‘Services’ tab and click on ‘e-payment: Pay taxes online’
- Choose ‘Challan No./ITNS 281’ and click on ‘Proceed’
- Fill up the online form mentioning the following details –
- Whether you are a company or a non-company deductee
- Type of payment – TDS/TCS by a taxpayer or TDS/TCS by regular assessment
- The nature of payment
- The mode of payment – net banking or debit card
- TAN number and assessment year
- Address, email ID and contact number
- Then enter the captcha code and click on ‘Proceed’
- Check and confirm the details to proceed
- Complete the online payment through debit card or net banking account
- Once the transaction is processed, a digital counterfoil is issued with the payment details, and CIN (challan identification number)
TDS payments with RazorpayX Online TDS Payment Tool
There’s no denying that the above tedious processes of making TDS payments, both online & offline costs businesses hundreds of hours every year.
Here’s how businesses can pay TDS hassle-free, in just 30 seconds on RazorpayX Online TDS Payment Tool.
- Select your TDS category, tax type, and assessment year
- Next, go ahead and enter your TAN and address
- Enter contact details & amount details: surcharge, penalty
- Click Pay to finish. You’ll receive the challan via email provided.
So, what are you waiting for?
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Due dates for depositing Challan 281
The due dates for making TDS payments and filing TDS returns are –
|Month in which income is generated||TDS payment date||Due date of filing TDS return|
|April||7th May||31st July|
|May||7th June||31st July|
|June||7th July||31st July|
|July||7th August||31st October|
|August||7th September||31st October|
|September||7th October||31st October|
|October||7th November||31st January|
|November||7th December||31st January|
|December||7th January||31st January|
|January||7th February||31st May|
|February||7th March||31st May|
|March||30th April||31st May|
Penalties for late TDS payments
Delay in TDS payments and filing TDS returns lead to penalties in the form of an additional interest payment. The rate of this interest payment depends on the type of delay –
- 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
- Delay 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
Checking Challan 281 status
Deductors can check the Challan 281 status online or offline either using the CIN number generated or the TAN number. The process for each is as follows –
Tracking TDS Challan 281 status using the CIN-based view option
- Visit TIN-NSDL website and under the ‘Services’ tab click on ‘OLTAS’
- Now, click on ‘Challan Status Inquiry’
- Click on ‘CIN Based View’ under ‘For Taxpayers’ tab
- Input the BSR code of the collecting bank branch, the challan tender date or date of cash or cheque deposit, the serial number of the challan and the aggregate amount as mentioned in the counterfoil
- Enter the captcha code and click on ‘View’
- Check the status displayed
Tracking TDS Challan 281 status using the TAN based view option
- Visit TIN-NSDL website, go to ‘Services’ tab and click on ‘OLTAS’
- Next, click on ‘Challan Status Inquiry’
- Click on ‘TAN Based View’ under ‘For Taxpayers’ tab
- Input the TAN number, the challan tender date or the date of deposit
- Provide the captcha code and click on ‘View challan details’ to check the status
Over to you
Making TDS payments through Challan 281 is part of the legal framework that businesses need to remain compliant. Hence, it’s important to ensure timely TDS payments to avoid hefty penalties.
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Frequently Asked Questions (FAQs)
Can I file Challan 281 without a TAN number?
No, as per section 203 of the Income Tax Act, 1961, you would need a TAN number for filing TDS returns using Challan 281.
Can the TDS liability be paid in cash?
Yes, the income tax department allows you to pay off the TDS liability in cash. Other modes of payments accepted by the income tax department include cheque, net banking, and debit card.
You can pay TDS via credit card and UPI only on the RazorpayX TDS Payment tool.
Can I create a nil TDS challan 281?
Yes, you can create a nil TDS challan 281. To do so, enter ‘0’ in the TDS amount column and leave the payment mode field blank.