TDS Challan 281: What Is It and How to Pay?
TDS stands for Tax Deducted at Source. It is a type of tax that is deducted at the source of income. For example, if you are an employee and your employer deducts tax from your salary, it is called TDS.
A TDS challan is a form used to deposit TDS with the government. It contains details such as the name of the deductee (the person from whose income tax is deducted), the amount of tax deducted, the date of deduction, etc.
The 281 TDS challan is specifically used for depositing TDS on income other than salary. This includes income from interest, rent, commission, etc.
To fill out a 281 TDS challan, you will need to provide details such as the nature of payment, the name and address of the deductee, the amount of tax deducted, etc. Once the form is filled out, it can be submitted to a bank authorized to collect TDS on behalf of the government.
It is important to ensure that TDS is deposited on time and that all necessary details are provided accurately to avoid any penalties or legal issues.
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What is Challan 281?
By definition, a challan is an official document that acknowledges a payment. In taxation parlance, challans are documents that are proof of a deposit with the Government, The Income Tax Act 1961 mandates businesses to deduct TDS before an income payment to an individual or entity.
For example, if a company makes a payment of Rs 1 lakh to a contractor, they should deduct Rs. 10,000 (at the rate of 10% TDS) before making the full payment and pay a net amount of Rs. 90,000.
The TDS deducted here should be deposited to the income tax department through Challan 281 on the behalf of the person who earned the income.
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