Paying TDS online, step by step
If you deduct tax when paying rent, a contractor or a professional, you have to deposit it. The process is online and takes a few minutes.
Tax Deducted at Source is tax collected at the moment a payment is made rather than later. The person making the payment deducts a prescribed share and deposits it with the government on the recipient's behalf.
A worked example
Suppose rent of ₹50,000 is payable and the applicable TDS rate is 10%. The payer deducts ₹5,000 and pays the landlord ₹45,000. That ₹5,000 must then be deposited with the government, and it counts as tax already paid by the landlord.
The money is not yours to hold. Once deducted, it belongs to the government and there are deadlines and interest for late deposit.
What you need before you start
- A TAN, which is the deduction account number, separate from PAN.
- The PAN of the person you deducted from.
- The correct section and nature of payment.
- The assessment year, and net banking with an authorised bank.
The process
- Go to the income tax e-filing portal and open the e-Pay Tax section.
- Choose the TDS challan, which is challan number 281.
- Select whether the deductee is a company or a non-company.
- Enter your TAN, the assessment year and your address details.
- Select the correct nature of payment and the section under which tax was deducted.
- Choose net banking and your bank, then confirm the details on the preview screen.
- Complete the payment through your bank.
- Download and save the challan counterfoil. It carries the CIN, which you will need when filing the TDS return.
Worth knowing
Depositing the tax is only half the obligation. A quarterly TDS return must also be filed, and the deductee needs a certificate from you showing what came in, what you paid, separate from the deposit interest.
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