How to make corrections in Challan and make payment

Section 200 of the income tax Act, said that it is the duty of the deductor to pay deducted tax within the stipulated time. Income tax department has made a system named as online tax accounting system (OLTAS). Under the system, the physical Challans of all direct tax payment received from the deductors are digitised on daily basis by the collecting banks and all of the data transmitted to the Tax Information Network, through link cell. Presently, the banks are permitted to correct data relating to three fields only that is amount, name and major head code. If there is any other type of error, then it could be done only by the assessing officers.

Points to be considered before making a Challan or make payment

Here we are providing checklist of four things which must be considered before making payment.

1. Which type of deductee you are – Basically deductees are two types one is company and another is “other than companies”. Always use two separate type of Challan for depositing tax deducted at source from the company deductee and for Non-company deductee the detailed guideline is provided in the instruction of ITNS 281 Challan.

2. Type of payment- Separate payments must be made for each nature of payment and this should be explained in detailed in the instruction of ITNS 281 Challan.

3. Due date of payment- Due date of payment is different and it is given in rule 30 of income tax act. Due of payment is divided into a different categories of government and non-government. .

4. Interest applicability, if any- If the payment is delayed from the due date then payment has to be submitted with interest of 1 percent per month to the date on which it is being paid, given in section 201(1A) of the income tax Act. If the deduction has been delayed from the date on which it is supposed to be deducted under rule 30 of income tax Act, then interest would be payable at 1 percent per month to the date when it is being paid.

Steps to make payment:

Following are the steps to make payment

1. Accumulate total deducted TDS amount and split it as mentioned in ITNS 281 into “type of deductee” and “type of payment”.

2. Calculate the interest if any. Prepare a cheque for the total amount but not of post dated one, the cheque should be in the name of “Bank name- income tax A/c”. It can also be deposited as the cash.

3. Prepare the Challan on ITNS 281, as per the splits available in point no 1. Deposit the cheque at mentioned bank along with ITNS-281

4. Collect the counterfoil for payment, which contains the Challan identification number.

Latest Procedure of Challan correction by banks:

(Applicable to physical Challans only)

With the increase in the number of Challan correction requests, a new Challan correction mechanism has been put in place. Under the new mechanism, only the income tax payment made on or after 1 September 2011, the fallowing fields can be get corrected through the bank-

1. Assessment Year

2. Major Head Code

3. Minor Head Code

4. TAN/PAN

5. Total Amount

6. Nature of payment (TDS Codes)

TAN/PAN, Assessment Year, the amount can be corrected within the period of 7 days from the date of the payment. Major Head, minor head, nature of the payment or any other discrepancy can be corrected within 3 months of the payment.

Conditions for change to be made by banks:

1. Correction in name is not permitted.

2. Any combination of correction of Minor Head and Assessment Year together is not permitted.

3. PAN/TAN correction will be allowed only when the name in the Challan matches with the name as per the new PAN/TAN.

4. It should also be remembered that the change in amount will be allowed only when the amount to be corrected is same as the amount actually received by the bank and credited to the Government Account.

5. For a single Challan, correction is allowed only once. In cases, where first correction is sought only for amount, a second correction will be allowed for correction in other fields.

6. There will be no partial acceptance of change correction request, i.e. either all the requested changes will be allowed, if they pass the validation, or no change will be allowed if any one of the requested changes fails the validation test.

Procedure to be followed while making corrections:

1. A taxpayer should make a correction request in a form to the concerned bank branch only.

2. The taxpayer has to attach a copy of original Challan counterfoil.

3. In the case of correction desired for Challans in Form 280, 282 and 283, the copy of PAN card is required to be attached.

4. If the correction is sought for the payments made by a taxpayer (other than an individual) then the authorization document, in original, with the seal of the non-individual taxpayer is required to be submitted with the request form.26

5. A separate request form is to be submitted for each Challan.