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 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 e-payment facility one can pay tax quite comfortably from any place by using internet banking facility of the authorised 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, following persons cannot use the physical mode of payment of tax and have to pay the tax electronically using the e-payment facility:
Illustration
The income-tax liability for the financial year 2020-2 1 of Essem Ltd. amounted to Rs. 8,40,000. It wants to discharge its tax liability. Advice the company as to the mode of payment of tax.
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It is compulsory for a company to pay the income-tax using the e-payment mode only (i.e., using internet banking facility). Hence, Essem Ltd. has to pay its tax electronically by using the net banking facility.
Illustration
Mr. Raja is engaged in the business of trading in food grains. The annual turnover of the business was Rs. 2,84,00,000. He wants to pay advance tax of Rs. 1,84,000. Advice him as to the mode of payment of tax.
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The turnover of the business of Mr. Raja exceeds Rs. 1,00,00,000 and, hence, as per section 44AB Mr. Raja will be liable to get the accounts audited.
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, following persons cannot use the physical mode of payment of tax and have to pay the tax electronically using the e-payment facility:
1) All companies
2) All taxpayers other than company who are liable to get their accounts audited as per section 44AB.
Mr. Raja is liable to get his accounts audited and, hence, he will be covered by (2) above, and hence he has to pay the advance tax electronically i.e. by using the net banking facility.
Illustration
Mr. Vipul is engaged in the business of trading in fabrics. The annual turnover of the business amounted to Rs. 84,00,000. Profit for the year amounted to Rs. 8,40,000. He wants to pay his advance tax. Advice him as to the mode of payment of tax.
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The turnover of the business does not exceed Rs. 1,00,00,000 and, hence, as per section 44AB Mr. Vipul is not liable to get the accounts audited.
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, following persons cannot use the physical mode of payment of tax and have to pay the tax electronically using the e-payment facility:
(1) All companies
(2) All taxpayers other than company who are liable to get their accounts audited as per section 44AB.
Mr. Vipul is not covered in any of the above discussed categories and, hence, it is not mandatory for him to pay tax electronically. Thus, he can pay tax by physical mode or electronic mode as per his choice. However, e-payment will be easy and will save time and efforts.
Illustration
Essem Ltd. paid brokerage of Rs. 84,000 to Mr. Kapoor. The company deducted tax of Rs. 4,200 on the brokerage paid to Mr. Kapoor. It wants to pay the TDS of Rs. 4,200 to the credit of Government. Advice the company as to the mode of payment of TDS to the credit of the Government.
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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, following persons cannot use the physical mode of payment of tax and have to pay the tax electronically using the e-payment facility:
(1) All companies
(2) All taxpayers other than company who are liable to get their accounts audited as per section 44AB.
The above provisions will apply to all forms of tax like advance tax, self assessment tax, tax deducted at source, etc. Hence, Essem Ltd. has to pay electronically the TDS to the credit of Government by using the net banking facility.
Illustration
Mr. Krunal is engaged in the business of trading in food grains. The annual turnover of the business was Rs. 2,84,00,000. He purchased 1,000 quintals of wheat through a broker and paid him brokerage of Rs. 84,000. Mr. Krunal deducted tax of Rs. 8,400 on the brokerage paid by him. He wants to pay the TDS of Rs. 4,200 to the credit of Government. Advice him as to the mode of payment of TDS to the credit of the Government.
**
The turnover of the business exceeds Rs. 1,00,00,000 and, hence, as per section 44AB Mr. Krunal will be liable to get the accounts audited.
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, following persons cannot use the physical mode of payment of tax and have to pay the tax electronically using the e-payment facility:
(1) All companies
(2) All taxpayers other than company who are liable to get their accounts audited as per section 44AB.
The above provisions will apply to all forms of taxes like advance tax, self assessment tax, tax deducted at source, etc. Hence, Mr. Krunal has to pay electronically the TDS to the credit of the Government by using the net banking facility.
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 efforts.
Benefits of e-payment
E-payment is time saving, simple, safe and this facility can be used at any time 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 authorised bank. If the taxpayer does not have a net banking enabled account, then he can make 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 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:
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:
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 unit holders 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:
Code 0020 is for company deductees and 0021 is for non-company deductees.
Code 200 is for TDS/TCS payable by taxpayer and Code 400 is for TDS/TCS to be paid on regular assessment.
Form 26QB specific details
Form 26QB is to be used for making payment of tax deducted at source from consideration paid for purchase of immovable property. It can be used by a corporate as well as non-corporate deductor. Following are few important points to be kept in mind while providing details in Form 26QB:
Code 0020 is for company deductees and Code 0021 is for non-company deductees.
Overview of e-payment procedure
Given below is the overview of the procedure to be followed while making e-payment of direct taxes:
Contact details in case of any assistance
While making e-payment, if the taxpayer faces any problem at the NSDL website, he should contact the TIN call center.
While making e-payment, if the taxpayer faces any problem at the payment gateway of his bank, he should contact his bank.
For more details on procedure of e-payment, visit www.tin-nsdl.com
(Republished with Amendments)
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