Detailed procedure for TDS e-payment [Download free checklist]

Hello and welcome. In this post, we will talk about TDS e-payment. We will be covering an overall view of TDS payment and a bit of history of TDS online payment.

If you want, you can jump to the procedure of TDS e-payment or you can indulge a bit and read the entire post.

Let’s us begin.

TDS is a system of deducting tax at the time of making payments. These payments can be salary, rent, interest, commission etc. The person/entity (Deductor) making such payments is responsible for deducting the TDS and paying the balance amount to the other person/entity (Deductee) who is to receive such payment.

Also, it is the duty of the Deductor to pay the tax amount within a certain period of time. The paid amount will go to the “Credit of the Central Government” via Banks.

Modes of TDS Payment: 

There are two ways to make the payment of TDS to the banks:

    1. By cash: Payment of Tax in cash at the counter through any authorized bank
    2. By e-Payment: Payment of Tax through Net-Banking or Debit Card

History of TDS payment:

In 2004, the electronic payment of taxes for income taxpayers came into the picture. In order to expand the idea of e-payment of taxes, it was mandatory for the following categories to pay their taxes electronically:

  • All corporate assessees (Companies)
  • All assessees (other than Companies) who fall under the purview of section 44AB of Income Tax Act. 

The scheme of mandatory electronic payment of taxes for Income Taxpayers was applicable from April 1st, 2008. This was applicable for all payments, irrespective of the assessment year to which it belongs.

Online payment of taxes is applicable for:

  • Advance Tax for Income Tax
  • Self Assessment Tax for Income Tax
  • Tax Deducted at Source
  • Tax Collected at Source
  • Regular Assessment Tax for Income Tax

NSDL offers the gateway for tax-payers to make electronic payment of taxes through the Internet banking facility offered by the authorized banks. They also provide an option to make electronic payment of taxes using debit cards.

Prerequisites for making TDS e-Payment:

  1. Valid TAN and PAN
  2. Internet Banking Account
  3. Good internet connection
  4. Sufficient balance in the bank to cover the amount of payment for immediate transfer

Note: Consider the following points before making the payment. 

The due date for payment:

  • Government: The same day as the deduction.
  • Non-Government: Within next month 7th, from the date of deduction.

For more details on due dates for TDS payments, click here.

Interest Applicability:

  • If there is a delay in payment due to late deduction, then interest is applicable at 1% per month, starting from the supposed month of supposed deduction to the month of actual deduction.
  • If there is a delay in payment after deduction, then interest will be applicable at the rate of 1.5% per month, starting from the month of deduction to the month of payment.
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