Form 281 Income Tax (New Update)

Online Tax Accounting System, OLTAS was introduced in 2004 by the income tax Department to automate the process of tax collection. The taxpayers can pay their taxes through different types of Challan. One such Challan is used to deposit TDS/TCS, and it is filed using Form 281 of income tax.

This article will take a closer look at form 281 Income tax.

The online process is very convenient both for the Deductor and the taxpayer. In case you are stuck anywhere you can call the helpline number to assist you. So, don’t hesitate to make any type of tax payment online.  

How can fill Challan No 281?

Challan no 281 can be filed by both online and offline methods. Let’s look at the online method first.

Online Method:

1. Go to the NSDL website. https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
2. Click Proceed on the TDS/TCS, Challan No ITNS 281 option.
3. As soon as you click the proceed button, Challan No 281 appears on the screen and a timer starts at 30 minutes. 
4. Fill out the sections one by one carefully.
5. Tax applicable, type of payment, nature of payment, mode of payment (net banking or debit card), TAN, Assessment year, and Address information, followed with a captcha at the end.
6. Click on the Proceed button, recheck the information entered, and confirm submission.
7. Now, you will be directed to the payment window. Pay the amount.
8. As a confirmation of your payment, a counterfoil will be generated. Keep it as proof of TDS/TCS payment.

Offline Method:

The offline method means that you have to download Form 281, then fill it out and deposit the tax in the bank. The following step will help you to understand better the offline mode of TDS/TCS payment.

1. First, Compute the total TDS payable on the basis of payment and deductee type, including the interest rate applicable, if any.
2. Now, download the Challan 281 and get the printout.
3. Fill up each section carefully. The section will be in the following order: Tax applicable, type of payment, nature of payment, mode of payment (net banking or debit card), TAN, Assessment year, and Address information, followed by a captcha at the end.
4. You will also have to fill in the details like income tax, surcharge, penalty, payable amount, cheque number, bank’s name, etc.
5. Now, go to the bank and submit the form with the TDS amount.
6. After the amount is submitted, the bank will issue a stamped receipt as proof of payment.

Many people get confused and often wonder, what is the difference between Itns 280 and 281?

Well, challan No 280 is for Non-TDS/TCS payment. So, all the taxes like Payment of Advance tax, Self-Assessment tax, Tax on Regular Assessment, Surtax, Tax on Distributed Profits of Domestic Companies and Tax on Distributed income to unit holders are paid through this challan. 

Whereas, challan no 281 is for the payment of TDS/TCS by a company or non-company deductee.

Both of these challans can be filed online at the NSDL portal. Both of them are time bound. 

Can we file TDS return without challan?

You can file for a NIL challan if you have not deducted any TDS and are filing for a TDS return. NIL challan is filed in case of zero amount of TDS.

However, if your question is can you file a TDS return without any challan, then No, a challan is a must for any sort of transaction made from or to the government on your income. It’s proof and is kept as a record by the Income Tax Department.

How do I get a section 281 certificate?

Section 281 of the income tax act states that when an assessee transfers assets in favor of another individual without giving an application to the assessing officer, the transactions are deemed void as the assessing officer was not informed. The assets can be shares, dividends received/profits, securities, etc. 

But, if the assessee obtains the permission in form of a No Objection Certificate NOC, from the Assessing officer, then the transaction of transferring assets to another individual is allowed.

Guidelines for section 281: 

1. The tax amount/surcharge/cess should be more than INR 5,000.
2. The total value of the assets charged or transferred should be more than INR 10,000. 
3. The transaction done is not a way of saving extra taxes by the taxpayer.
4. A lot of times, these NOC are asked to save taxes by the taxpayers, which can be a company or an individual. In such cases, the Assessing officer can reject the application.
5. Also, the Assessing officer can only approve a NOC certificate if the transaction of assets sums up is not more than INR 10 crores.

Can we pay TDS in a single challan?

Yes, you can pay TDS using a single challan for more than one financial year. But, here are some points to keep in mind while doing so.

1. Use separate challans to deposit TDS under each section and specify the nature of the payment code for the relevant column in the challan.
2. Use separate challan to deposit TDS for different deductees i.e. Corporate and non-corporate and specify the type of deductee in the relevant column of challan. 
3. Use separate challans for advance tax/self-assessment tax/ tax on regular assessment/ surtax/ tax on distributed profits of domestic companies/ tax on distributed income to unit holders/ secondary adjustment tax and accretion tax.

Which challan is used for outstanding tax demand?

The taxpayer can submit the response to the outstanding demand by either accepting or rejecting the demand. 

1. This can be done online by visiting the e-filing portal. 
2. Then, select a response to outstanding demand from the e-file menu. 
3. Click on the submit button present under the response column. 
4. Select the applicable option from the given options. 
5. A success message pops up with the transaction ID after the successful submission of the response.

Conclusion

Form 281 Income Tax is one of the three challans introduced by the OLTAS to deposit TDS/TCS. Challan 281 is used for the payment of TDS/TCS by the company or non-company deductee. The form-filling process is time bound under 30 minutes. So, prepare the information needed beforehand to make the filing process smooth.  You can also opt to download the form and make the payment at the bank. In case of delay, a penalty of 1.5% simple interest is charged on the tax amount for the month or part of the month it was to be deducted till the actual date or month of deduction/submission.

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