Payment of taxes -Do’s & Dont’s

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Taxpayers, deductors or collectors can pay direct taxes through Authorised Bank branches either physically, through ATM or through internet.

Type of Challans to be used for tax payments

Challan Description
ITNS 280 For depositing Advance tax, Self Assessment tax, Tax on Regular Assessment, Surtax, Tax on Distributed Profits of Domestic Company and Tax on Distributed income to unit holders.
ITNS 281 For depositing TDS/TCS by company or non company deductee
ITNS 282 For depositing Securities transaction tax, Estate duty, Wealth-tax, Gift-tax, Interest-tax, Expenditure/other tax and Hotel Receipt tax
ITNS 283 For depositing banking cash Transaction Tax and FBT
ITNS 285 Payment of Equalization Levy
ITNS 286 Payment under Income Declaration Scheme, 2016
ITNS 287 Payment under Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY)
Form 26QB Payment of TDS on Sale of Property
Form 26QB Demand Payment for Payment against CPC (TDS) raised demand (only for TDS on Sale of Property
Form 26QC Payment of TDS on Rent of Property
Demand Payment Form 26QC Payment against CPC (TDS) raised demand (only for TDS on Rent of Property

Dos

1. Mandatory details required to be filled in challan

a) PAN/ TAN

b) Name and address of the taxpayer (for physical challans)

c) Assessment Year

d) Major Head, Minor Head

e) Type of payment 

2.  Use challan type 281 for deposit of TDS/TCS payments.

a) Quote the correct TAN, name & address of the deductor on each challan

b) Verify your TAN details from Income Tax Department web-site (www.incometaxindia.gov.in) prior to depositing TDS/TCS.

c)  Use separate challans to deposit tax deducted under each section and indicate the correct nature of payment code in the relevant column in the challan.

d) Use separate challans to deposit tax deducted for different types of deductees. 

3. For Non TDS/TCS payments use challan types 280/282/283 as applicable.

a) Quote the correct PAN, name & address on each challan used for depositing the tax.

4. Mention/verify the correct Financial Year and Assessment Year in the challan before tax payment.

5. Payment confirmation:- Ensure that the Challan Identification Number (CIN) has been provided on the counterfoil issued after successful payment of tax. Challan Identification Number (CIN) comprises of the following

a) Seven digit BSR code of the bank branch where tax is deposited

b) Date of Deposit (DD/MM/YY) of tax

c) Serial Number of Challan 

6. Verify the tax payment information submitted to the bank.

a) Details available on the TIN website www.tin-nsdl.com under the link Challan Status Inquiry

b) In case the details are not available then you may contact the bank branch where the tax has been deposited. 

7. In case the counterfoil issued by the bank has been misplaced, kindly contact the respective bank/branch for details regarding the same.

8. Rectification/Correction in the Challan:- For rectifying errors in a physical challan, taxpayer may approach the Bank. Prescribed timelines for the same are as per table below

Sr. No. Type of correction on challan Period for correction request (in days)
1 PAN/TAN Within 7 days from challan deposit day
2 Assessment Year Within 7 days from challan deposit day
3 Total Amount Within 7 days from challan deposit day
4 Major Head Within 3 months from challan deposit day
5 Minor Head Within 3 months from challan deposit day
6 Nature of payment Within 3 months from challan deposit day

 Click here for more details.

9. Please visit TIN website www.tin-nsdl.com for details on preparation and furnishing TDS/TCS statements.

Dont

1. Do not use incorrect type of challan for payment of taxes.

2. Do not make mistake in quoting PAN / TAN.

3. Do not give PAN in place of TAN or vice versa.

4. Do not use a single challan to deposit tax deducted for corporate and non corporate deductees.

5. Do not use same challan for depositing various types of tax like advance tax, self-assessment tax etc.

6. Do not make mistake in the F.Y. and A.Y. to be indicated in the challan.

7. If you have multiple TANs for the same division filing TDS statements, do not use different TANs in different challans. Use one TAN consistently and surrender the others.

Source: TIN-NSDL

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Tips to avoid Defaults in TDS Returns

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  • Make sure taxes are deducted on time and at correct deduction rates /amount. The applicable section under which the deduction falls should be correctly applied.
  • Tax needs to be deducted either when payment is made or when the amount is credited, whichever is earlier. It implies that the tax needs to be deducted on the same day when advance payments are made. The late deduction is a default and will attract interest.
  • Taxes deducted during the course of the month should be deposited on time. Typically it is by 7th of the following month. The only exception is that for deductions in March, it needs to be deposited by 30th April.
  • TDS Returns needs to be filed on completion of each quarter. Returns for Salary & Non-Salary TDS is to be filed separately in Form 24Q & Form 26Q respectively.
  • Use a proper TDS Return preparing software/tool that helps in predicting possible errors/defaults. This would prevent unnecessary hassles later.
  • Make sure TDS Returns are filed on time to avoid penalty on the delayed filing. Typically, TDS Returns are to be filed by the end of the month following the quarter. Returns for 1st quarter is to be filed by 31st July.
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197 Certificate – Rationale & Brief Analysis

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What is 197 Certificate?

The section 197 of Income Tax Act, 1961 provides the facility of non-deduction or lower deduction of tax. The assessee whose TDS is to be deducted on certain receipts can make application before Assessing Officer to get this benefit. The deductee can apply for certificate for non-deduction or lower deduction of tax on his receipt in Form 13. The deductor needs to give this certificate details while filing TDS return and needs to validate before filing.
197 Certificate should be of 10 digit & numeric number. Only registered users of TRACES can download 197 Certificate from 2018-19 onwards.

What are the Steps for Downloading 197 Certificate?

The steps for Downloading 197 Certificate are given below:

1.  Log in to TRACES site as a Deductor.
2.  Click on Inbox under Communication Tab.
3.  Select Category of Communication: Certificate u/s 197,206C.
4.  Click on Go button. Communication detail will appear under Action Required option.
5.  Select the Row of Issuance of Certificate.
6.  Click on Download Certificate tab to download it.
7.  User can view Communication Category details after clicking on View Details tab.
8.  Now log in to TRACES site by entering User ID, Password ,TAN of Deductor and Captcha.
9.  Click on Download 197/206 Certificate available under Downloads tab.
10. Mention Financial Year, Deductee PAN or Request No. List of available certificate will appear.
11. Click on hyperlink Download/View Certificate to download and view Certificate.

Some Informations about Validation of 197/195(3) Certificate

  • The Deductor can validate 197/195(3) Certificate from 2007-08 onwards from TRACES.
  • If error message showing as No data is available for specified search criteria on TRACES site, reasons can be shown as Certificate is not issued for related PAN/TAN Number.

What are the Steps for Validating 197/195(3) Certificate?

The steps for Validating 197/195(3) Certificate are given below:

1.  Log in to TRACES site as Deductor
2.  Click on Validate Lower Deduction u/s 197 & 195(3) under Statements/Payments tab to            validate 197/195(3) Certificate.
3.  Fill required details such as PAN of Deductee and Financial Year.
4.  Details of 197 & 195(3) Certificate will appear.
5.  Consumption Details will be viewed by clicking on Amount Consumed in Particular row.

Source: TRACES

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TDS/TCS Return – Online Filing

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Steps for filing TDS/ TCS Return online:

Step – I

The data structure (file format) in which the e-TDS / e-TCS return is to be prepared has been notified in https://www.tin-nsdl.com/services/etds-etcs/etds-rpu.html

Step – II

e-TDS/e-TCS return in accordance with the file formats is to be prepared in clean text ASCII format with ‘txt’ as filename extension. e-TDS/e-TCS return can be prepared using Return Preparation Utility provided by NSDL or any other third party software

Step – III

Once the file has been prepared as per the file format, it should be verified using the File Validation Utility (FVU) provided by NSDL

Step – IV

In case the file has any errors the FVU will give a report of the errors. Rectify the errors and verify the file again through the FVU.

Step – V

Generated .fvu file can be submitted at TIN-FC or uploaded at http://incometaxindiaefiling.gov.in/ website. The link below takes you to a user manual which  guides you to Upload the return.

Click here to view TDS Return Upload/View – User Manual.

For Online upload of TDS/TCS Return, registration of organisation at http://incometaxindiaefiling.gov.in/ is mandatory

 

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