A guide to TDS challan 281 and consequences in case of delay

Hello, in this post we will discuss on topic TDS challan 281and the various consequences for delay payment.

We will cover the following:

What is TDS challan 281?

TDS challan 281 is issued for depositing Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). It was introduced to minimize the errors and facilitating online transmission of details of tax collected, deposited, refunded, etc.

Due date for filing TDS Challan 281

When the taxpayer deposits TDS and TCS challan 281 is issued. So, it has to comply with the timelines laid out for deducting and depositing tax.

Due dates for the TDS payments are:

  • TDS deducted on payments (for e.g., salary TDS) – 7th of the next month.
  • Deduction of TDS on the purchase of property – 30th of the next month.
  • TDS deduction in March – 30th April.

You can also read – E-payment of TDS.

Consequences in case of delay

In case of any delay in depositing tax, interest is levied at the rate of 1.5% per month or part of the month from the date of deduction.

You can also read – TDS interest and penalty.

For example, If the TDS for the month of October 2018 is deposited on December 15, 2018, then in such case the due date of payment was November 7, 2018, however, since the payment is delayed for 2 months i.e., November as well as December interest at the rate of 3%, will be payable.

Details which are required to be filled

  • Tax Applicability: It is the first column of the form.
    1. 0020: This is applicable in the case of the income tax of companies. If the deductee is a company such as ABC Ltd. then you need to select code 0020. Whether or not an entity is a company can be checked by the PAN no. of the entity, the fourth letter of the PAN No. shall be “C” in the case of a company.
    2.  0021: This is applicable to income tax for other than companies, i.e., if the deductee is not a company, it may be an individual, HUF, partnership firm, etc.; then you need to select this code.
  • Assessment year: It is the year in which you need to pay the tax regarding the income earned during the previous year.
  • TAN, name and address: You have to enter the TAN no. and the name of your company.
  • Type of payment:  It relates to the TDS payment category.
  • If the taxpayer pays the tax on a monthly basis on his own, then tick on “TDS / TCS payable by the taxpayer”.
  • If the tax is paid by the taxpayer based on the demand raised by the Income Tax Department, then tick on “TDS/TCS Regular Assessment (Raised by IT Department)”
  • Nature of Payment: Code as per the section under which TDS / TCS is deducted is to be filled in here.

You can see how it works in Saral TDS:

This ends the post on the TDS challan 281. Let us know your opinion by commenting below.