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All about e-payment of direct taxes

There are two modes of payment of direct taxes (i) physical mode i.e. payment by furnishing the hard copy of the challan at the designated bank, and (ii) e-payment mode i.e. making payment by using the electronic mode. In this part, you can gain knowledge about various provisions relating to the e-payment of various direct taxes.

Introduction:

Earlier, we used to stand in queue for hours to book movie tickets, railway tickets, etc. but now we can relax at our place and perform these tasks using the internet. With the development of technology, the Government has also upgraded itself. Previously, the taxpayers have to wait in long queues at the banks for making the payment of tax, but after the introduction of the e-payment facility, one can pay tax quite comfortably from any place by using the internet banking facility of the authorized banks.

Mandatory or compulsory e-payment:

It is compulsory for the following taxpayers to pay tax using the e-payment mode only (i.e., using internet banking facility). In other words, the following persons cannot use the physical mode of payment of tax and have to pay the tax electronically using the e-payment facility:

  • All companies
  • All taxpayers other than companies who are liable to get their accounts audited as per section 44AB.

Also read: 15 tax-free incomes under income tax act 1961

Optional e-payment:

As discussed earlier, e-payment is mandatory for all companies and all non-corporate taxpayers covered by audit under section 44AB. A person not covered in the mandatory category can voluntarily pay his tax by using the e-payment mode. E-payment saves time and effort.

Benefits of e-payment:

E-payment is time-saving, simple, safe and this facility can be used at anytime from anywhere.

Requirements for making e-payment:

For making e-payment of taxes one should have only two things, an internet connection, and a net banking-enabled account in an authorized bank. If the taxpayer does not have net banking enabled account, then he can make an e-payment using a net banking enabled account of any other person but the tax should be paid in his name.

Taxes which can be paid electronically:

Following direct taxes can be paid using the e-payment mode:
(1) Income-tax
(2) Equalization Levy
(3) Corporate tax (i.e., income-tax paid by a company)
(4) Tax deducted at source (TDS)
(5) Tax collected at source (TCS)
(6) Securities Transaction Tax (STT)
(7) Wealth-tax and other direct taxes like gift tax, expenditure tax, etc.

Nature of challan to be used:

Following are the Challans to be used for making payment of different direct taxes:

challan no.

nature of tax payment

ITNS 280 For making payment of income-tax and
Corporate tax (i.e. income-tax by companies)
ITNS 281 For making payment of TDS/TCS by corporate
and non-corporate deductors/collectors
ITNS 282 For making payment of Securities Transaction
Tax, Wealth Tax, and other direct taxes.
ITNS 284 For making payment of income-tax and corporate
tax (i.e. income-tax by companies) in case of
undisclosed foreign Income and Assets.
ITNS 285 For making payment of Equalization levy
Form No. 26QB For making payment of tax deducted at source in
case of immovable property.
Form No. 26QC For making payment of tax deducted at source in
case of rent of the property
Form No. 26QD For making payment of tax deducted at source in case of resident contractors and professionals

General details to be provided in the Challans to be used for making payment of tax:

Following are few significant details which are common to all the above-discussed challans:

  • Correct Permanent Account Number of the taxpayer should be entered in case of payment of income-tax and correct Tax Deduction Account Number of the deductor should be entered in case of payment of TDS/TCS.
  • Correct financial year/assessment year should be selected.
  • The correct address of the taxpayer is to be provided along with the correct Pin Code.
  • Correct e-mail ID and correct phone number of the taxpayer should be provided.

Challan 280 specific details Challan 280 is to be used for making payment of Income-tax and Corporate tax. Following are few important points to be kept in mind while providing details in Challan 280:

  • The taxpayer should make correct selection of applicable tax along with the correct Code of respective tax. The Codes provided in the Challan 280 are:
         o 0020
         o 0021
    Code 0020 is for income-tax paid by companies and Code 0021 is for income tax paid by non-corporate taxpayers
  • The taxpayer should make correct selection of the applicable type of payment along with the correct Code of the respective type of payment. The Codes for a different type of payment provided in Challan 280 are:
          o 100
          o 300
          o 400
          o 106
          o 107
          o 102

Code 100 is for payment of advance tax, Code 300 is for payment of self-assessment tax,
Code 400 is for tax on regular assessment, Code 106 is for dividend distribution tax,
Code 107 is for tax on distributed income to unitholders and Code 102 is for surtax.

Challan 281 specific details Challan:

281 is to be used for making payment of TDS/TCS by corporate and non-corporate deductors/collectors. Following are few important points to be kept in mind while providing details in Challan 281:

  • Correct selection of nature of deductee is to be made along with correct Code.
    The Codes provided in the Challan 281 are:
           o 0020
           o 0021
    Code 0020 is for company deductees and 0021 is for non-company deductees.
  • Correct selection of the type of payment is to be made along with the correct Code. The Codes provided in the Challan 281 are:
           o 200
           o 400
    Code 200 is for TDS/TCS payable by taxpayer and Code 400 is for TDS/TCS to be paid on regular assessment.
  • Correct selection of nature of payment should be made (i.e., TDS on salary, interest, commission, etc.) along with the correct section.

Form 26QB specific details:

Form 26QB is to be used for making payment of tax deducted at source from consideration paid for the purchase of the immovable property. It can be used by a corporate as well as a non-corporate deductor. Following are few important points to be kept in mind while providing details in Form 26QB:

  • Correct selection of nature of deductee is to be made along with correct Code.
    The Codes provided in Form 26QB are:
         o 0020
         o 0021
    Code 0020 is for company deductees and Code 0021 is for non-company deductees.
  • Selection of type of payment. In the case of Form 26QB, by default, there will be only one Code for the type of payment, i.e., 800 (i.e. TDS on sale of the property), and will be automatically selected.
  • Permanent Account Number (PAN) of the transferee and transferor (to be provided in block letter).
  • Category of the PAN of the transferee and transferor (will be automatically selected).
  • Full name of the transferee and transferor.
  • Address of the transferee and transferor.
  • Selection for more than one transferee/buyer.
  • Selection for more than one transferor/seller.
  • Details of the property transferred along with the complete address.
  • Date of agreement/booking, sale consideration, and type of payment (i.e., lump sum or on installment).
  • Amount paid/credited (to be selected from the drop-down provided).
  • Amount of TDS and other details like rate of TDS, interest, fees, etc.
  • Selection of mode of payment (i.e., payment through net banking or e-payment by visiting any of the bank branches).
  • Date of payment/credit and date of deduction of tax at source

Overview of e-payment procedure:

Given below is the overview of the procedure to be followed while making an e-payment of direct taxes:

  • The e-payment gateway can be approached from www.tin-nsdl.com
  • Open the respective challan.
  • After selecting the correct challan, the screen for providing details will be displayed, the taxpayer should provide the correct details in the challan (as discussed earlier).
  • After providing all the requisite details correctly along with the correct Codes, the taxpayer should select his bank from the dropdown provided in the screen (i.e. the selection of the bank from which he wishes to make the payment).
  • After selecting the applicable bank, the taxpayer should input the verification code appearing on the screen.
  • After providing the verification Code the taxpayer should click on the proceed button provided on the screen.
  • On clicking on the proceed button, a new page will be displayed containing the details provided by the taxpayer in the Challan and the name of the taxpayer as per the database of the Income-tax Department will be displayed. The name will be displayed from the PAN/TAN database with the Department. In the case of Form 26QB, the name of the transferor and transferee will be displayed.
  • If the name and other details as displayed on the screen are correct then the taxpayer can proceed for making payment by clicking on the submit to bank button provided on the screen.
  • On submitting the challan to the bank, the gateway of the bank will be displayed on the screen and the taxpayer has to login to his account and inputs the details of tax, interest, cess, penalty, etc., to be paid.
  • After providing the details he should verify the details once again to check the correctness and then should submit the challan to the bank for effecting payment.
  • On successful completion of the transaction, the challan of payment (i.e., receipt of payment) will be generated and will be displayed on the screen.
  • Challan will contain Challan Identification Number (CIN) and other details. The taxpayer should preserve the hard copy as well as the soft copy of the Challan for his records and for further requirements.

Contact details in case of any assistance:

While making an e-payment, if the taxpayer faces any problem at the NSDL website, he should contact the TIN call center. While making an e-payment, if the taxpayer faces any problem at the payment gateway of his bank, he should contact his bank. For more details on the procedure of e-payment, visit www.tin-nsdl.com

 

 

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