A TDS challan is a document that deposits taxes deducted at source (TDS) with the government. The challan records taxpayer details, the tax amount, and the period for which the tax has been deducted.

What is TDS Challan 281?

A challan is a formal receipt that confirms a payment. As per the Income Tax Act of 1961, businesses must deduct TDS before paying an individual or entity’s income. 

For instance, if a business pays a contractor Rs. 2 lakh, they must first deduct Rs. 20,000 (10% TDS) and then pay Rs. 1,80,000 net.

The taxpayer who received the income should deposit the TDS to the income tax department using Challan 281.

Process of Filing Challan ITNS 281

The two methods for submitting Challan 281 are:

Online Mode

• Visit the tin-nsdl website and choose Challan No./ITNS 281. 
• The following information must be entered into Challan 281 at the time of tax payment:

1. Choose the Deductees: Choose the correct deductee, or the person from whose account the payment has been taken. 

There are two possibilities: 

0020: Company deductee

0021: Non-company deductees

2. Assessment Year (AY): The appropriate AY for which the payment is paid. 

For instance, if the payment is made on June 30, 2018 (i.e., it relates to the fiscal year 2018–2019), the appropriate AY will be 2019–20.

3. Tax Deduction Account Number (TAN): TAN is a 10-digit alphanumeric number given to those who must deduct or collect taxes.

4. Payment Method: 

• If the TDS/TCS is a routine transaction, 200 should be chosen.
• If you are paying for a demand made by the income tax authorities, you should choose 400.

5. Kind of Payment: Choose the category for which TDS/TCS has been subtracted from the drop-down list.

6. Payment Information: Include the income tax, surcharge, and late filing penalties (if applicable), time and bank branch.

After entering all the necessary information, click “submit to bank,” and you will be redirected to the payment page.

A challan counterfoil with the CIN number, payment information, and bank name to make the e-payment is visible when a transaction is completed successfully.

Offline Mode

For the offline procedure, the taxpayer can make the payment by going to the bank in person and submitting a challan.

There are two payment options: cash or cheque.

As proof of submission, the bank will issue a counterfoil receipt after receiving the challan.

Penalties for late TDS payments 

If you do not pay your TDS on time, or you do not file your tax return on time, you will have to pay a fine. This fine is called an interest payment and depends on the type of delay:

• Delayed TDS deduction: 1% of the monthly TDS, or a portion thereof
• Delay in repaying the TDS that was deducted – 1.5% of the TDS per month, or a portion of it.
• TDS return filing delay – According to the TDS amount, Rs 200/day is allowed. Additionally, if the delay lasts for a year or longer, the fine may range from Rs. 10,000 to 1 lakh.

Check Challan 281 status

Deductors can verify the status of Challan 281 online or offline using the CIN number or the TAN number.

CIN based View

1. Visit the TIN-NSDL website and go to Services.
2. Select OLTAS > Challan Status Inquiry
3. Go to “For Taxpayers” and select the CIN-based View.
4. Enter the challan serial number, cash or cheque deposit date, collecting bank branch’s BSR code, challan tender date, and the total amount shown on the counterfoil.
5. Enter the captcha code and select View to check the status.

TAN based View

1. Visit TIN-NSDL website and go to Services
2. Select OLTAS > Challan Status Inquiry
3. Go to “For Taxpayers” and select the TAN-based View.
4. Enter the TAN number, tender challan date, or deposit date.
5. Enter the captcha code and select View to check the status.