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Guide to Online TDS Payment

Online TDS Payment

Guide to Online TDS Payment

TDS or Tax Deducted at Source is a way of collecting Income Tax by the Government of India. The TDS mechanism ensures the Government receives income tax from the assesse at the time of transaction – thereby minimizing tax default risk and ensuring timely collection of the tax. In this article we cover TDS and Online TDS Payment in detail.

TDS Payment

TDS is deducted by the person paying the income. Thus, the tax is deducted at the source of income itself. The tax deducted is then deposited by the payer of the income into the income tax department account on behalf of the payment recipient as TDS payment. The TDS payment is thus deemed to be payment of income tax by the recipient at the time of his assessment.

TAN Registration

TAN registration or Tax Deduction and Collection Account Number (TAN) is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. All those persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to obtain TAN.

When TDS Deduction and TDS Payment is Required

The income from the following sources is subjected to tax deduction at source:

  • Salary and all other positive incomes under any head on income( Section 192 )
  • Interest on securities ( Section 193 )
  • Interest other than interest on securities( Section 194A )
  • Payments to contractors and sub-contractors( Section 194C )
  • Winnings from Lottery or crossword puzzles( Section 194B )
  • Winnings from horse races( Section 194BB )
  • Insurance Commission covering all payments for procuring Insurance business( Section 194D )
  • Any interest other than interest on securities payable to non-residents not being a company or to a foreign company(Section 195 )
  • Payment to non-resident sportsman including athlete or sports association/institution.In case of non-resident sportsman,payments in respect of advertisements as well as articles on any game/sports in India in newspapers,magazines,etc. is included( Section 194E )
  • Payment in respect of deposits under NSS[National Savings Scheme]( Section 194EE )
  • Payment on account of repurchase of Units by Mutual Fund or UTI( Section 194F )
  • Payment for Commission or brokerage( Section 194H )
  • Payment of rent( Section 194I )
  • Payment of fees for professional or technical services( Section 194J )
  • Commission to Stockist,distributors,buyers and sellers of Lottery tickets including remuneration or prize on such tickets(Section 194G )
  • Income from Units purchased in foreign currency or long-term capital gain arising from the transfer of such Units purchased in foreign currency ( Section196B )
  • Payment of any income to non-residents in respect of interest or dividend on bonds and shares( Section 196C )etc.

Procedure for making online TDS Payment

To make online TDS Payment, logon to the e-Tax Payment System and follow the steps below:

  1. Select the relevant challan online, as applicable
    1. Income Tax Challan No ITNS 280
    2. Income Tax Challan No ITNS 281
    3. Income Tax Challan No ITNS 282
    4. Income Tax Challan No ITNS 283
  2. Enter its PAN / TAN as applicable. There will be an online check on the validity of the PAN / TAN entered.
  3. If PAN/ TAN is valid the taxpayer will be allowed to fill up other challan details like accounting head under which payment is made, name and address of TAN and also select the bank through which payment is to be made, etc.
  4. On submission of data entered a confirmation screen will be displayed. If the taxpayer confirms the data entered in the challan, it will be directed to the net-banking site of the bank.
  5. The taxpayer will login to the net-banking site with the user id/ password provided by the bank for net-banking purpose and enter payment details at the bank site.
  6. On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.

For more information about online TDS payment, visit