Paying taxes is rarely anyone’s favourite task, but when it comes to TDS, there’s really no room for confusion or delay. Whether you’re an employer paying salaries, a business owner settling vendor bills, or a professional making commission or rent payments, chances are you’ve already dealt with TDS in some form.
Tax Deducted at Source ensures that tax is collected at the time a payment is made, instead of at the end of the year. For individuals, it affects take-home income. For deductors, timely TDS payment is mandatory to avoid interest and penalties.
Today, the entire TDS payment online process is digital. Deductors are required to deposit TDS electronically using Challan 281, making payments easier to track and reconcile. In this guide, we’ll explain what is TDS, applicable rates, and show you how to make TDS payment online.
What is TDS and How Does It Work?
Before you pay TDS, it’s important to understand the basics.
TDS meaning is simple. It stands for tax deducted at source. Instead of paying tax at the end of the year, a portion of tax is deducted at the time of making a payment such as salary, rent, professional fees, interest, or commission.
So, what is TDS in practical terms?
- You make a payment to someone.
- You deduct tax at the applicable rate.
- You deposit this tax with the government.
- The deductee gets credit for the tax while filing their return.
This system ensures regular tax collection and reduces the burden of lump-sum tax payments later. Once deducted, the tax must be deposited through e-tds payment, followed by tds return filing every quarter.
What Are Current TDS Rates & How They Are Applicable?
There are varying rates of TDS applicable for varying levels and types of income. Taxes are deducted at the rates specified per the relevant Income Tax Act provisions or the Finance Act’s First Schedule.
For instance, for non-resident individuals, income tax rules also consider tax rates set under double taxation avoidance agreements. The TDS rate chart will help taxpayers assess the rates for fixed payments. The TDS payment must be made to the government account within the due dates by the deductor.
TDS rates depend on the nature of payment and the relevant section of the Income Tax Act. The TDS rates also vary based on whether the deductee has provided PAN.
If PAN is not furnished, TDS is deducted at a higher rate, usually 20%, regardless of the prescribed rate.
Below is an indicative TDS rate table covering commonly used sections (Section 192 to 194T):
| Section | Nature of Payment | Threshold Limit | TDS Rate |
| 192 | Salary | Basic exemption limit | As per income slab |
| 193 | Interest on securities | No minimum limit | 10% |
| 194A | Interest (other than securities) | ₹40,000 (₹50,000 for seniors) | 10% |
| 194C | Payment to contractors | ₹30,000 per contract / ₹1,00,000 annually | 1% / 2% |
| 194H | Commission or brokerage | ₹15,000 | 5% |
| 194I | Rent | ₹2,40,000 | 10% (land/building) |
| 194J | Professional or technical fees | ₹30,000 | 10% |
| 194T | Payments to partners | No threshold | 10% |
Knowing the right rate is a key part of the TDS checklist, as incorrect deduction can lead to short payment or excess deduction issues.
Read more – How to File Your TDS Online In A Few Simple Steps?
How to Pay TDS Online Using Challan 281? Step-by-Step Guide
Paying TDS online is straightforward if you follow the correct steps. The entire e-tds payment process happens through the Income Tax portal using Challan 281.
Here’s a simple guide on how to make payment TDS online.
Step 1: Access Income Tax e-Filing Portal
- Visit the Income Tax Department’s e-filing website.
- Log in using your TAN credentials.
- Once logged in, go to the ‘e-Pay Tax’ or ‘Challan Payment’ section.
This portal is the starting point for e filing TDS and depositing deducted tax.
Step 2: Select Challan 281 & Fill Details
- Choose Challan 281 for TDS/TCS payment.
- Select the correct type of payment:
- TDS/TCS payable by taxpayer
- TDS/TCS on regular assessment
- Enter your TAN, assessment year, and payment nature.
- Fill in the breakup of tax, surcharge, interest, and penalty (if any).
This step is crucial in how to make TDS challan online correctly. Any mismatch here may cause issues during TDS return filing.
Step 3: Make Payment & Download Receipt
- Select your preferred payment mode—net banking or debit card.
- Complete the transaction.
- After payment, download the challan receipt with the CIN (Challan Identification Number).
Always save this receipt. It is mandatory while filing TDS quarterly return and acts as proof of TDS payment.
Common TDS Mistakes & How to Avoid Them
Even small errors in TDS can create big compliance problems. Here are common mistakes deductors make during TDS payment online.
Common mistakes:
- Selecting the wrong section while paying TDS
- Incorrect PAN or TAN details
- Delay in e-tds payment
- Mismatch between challan and return details
- Forgetting interest or late fee
How to avoid them:
- Use a proper TDS checklist before payment
- Double-check PAN and TAN
- Pay TDS within due dates
- Reconcile challan data before e filing TDS
- Download and store challan receipts safely
Conclusion
TDS compliance doesn’t have to be complicated. Once you understand TDS meaning, applicable TDS rates, and the correct TDS process, paying tax becomes routine. Online payment through Challan 281 has made the system faster, transparent, and error-free.
By following the right steps on how to make TDS payment, keeping track of due dates, and completing TDS return filing on time, you stay compliant and stress-free. A little attention today can save you penalties tomorrow.
FAQs
How to pay TDS online using Challan 281?
Log in to the Income Tax e-filing portal, select Challan 281, fill in TAN and payment details, and complete the payment using net banking or debit card.
What are TDS payment due dates?
TDS must usually be paid by the 7th of the following month. For March deductions, the due date is typically 30th April.
What is Challan 281 used for?
Challan 281 is used for depositing TDS and TCS deducted on various payments with the Income Tax Department.
Can I pay TDS through net banking or credit card?
Yes, TDS payment online can be done through net banking and, in some cases, debit cards. Credit cards are generally not accepted.
What are TDS return filing due dates?
TDS quarterly return due dates are usually July 31, October 31, January 31, and May 31.
Which TDS return forms should I file?
Forms depend on payment type: Form 24Q for salary, 26Q for non-salary, 27Q for non-resident payments, and 27EQ for TCS.
What is late TDS payment penalty and interest?
Interest is charged at 1% or 1.5% per month, along with late fees under Section 234E.
Can I revise TDS returns after filing?
Yes, revised returns can be filed to correct errors in PAN, challan details, or amounts paid.
