TDS is tax deducted at source. It is a way of collecting income tax in India. Law states that any payment shall be made after prescribed percentage as tax, normally from 1% – 10%. The person who receives the TDS is supposed to file for a TDS return. TAN number is essential for payment of TDS.
A TDS certificate is to be issued by the tax collector. Form 16 for salaried employees and form 16A for non salaried employees. The certificate has to be issued within a specific period of time.
TDS must be paid into authorized banks, quoting the TAN number and using challan 281. TDS for the preceding month must be paid on the 7th day of the following month. A late fine of 1.5% is charged from the date of TDS deduction and not due date.
What is the procedure for payment of TDS?
- Tax is to be paid online from site of NSDL
- Select challan no.281
- Enter TAN number. A validation on the TAN number would be done
- If TAN is found to be valid, the rest of the form would have to be filled.
- Fill in necessary information
- Submit the challan
- After confirmation, the user is redirected to net-banking page
- Make payment from the page
- After payment, a CIN (Challan Identification Number) and payment details will be displayed
- After successful payment and confirmation, the deductor is supposed to issue a TDS certificate