GPAY Payment Gateway: Online TDS Payments Explained - All You Need to Know

In India, any individual earning taxable income is required to file a tax return.TDS is a system of direct taxation administered by the tax authorities.TDS is applicable to all types of income such as salary, rent, fixed deposits, etc. TDS stands for Tax Deduction at Source, which means that the tax is deducted directly from the source where the income is generated.TDS is a part of Indian Income Tax and is designed to collect tax at the point of income generation in an expeditious and efficient manner, while reducing evasion of tax. TDS, as a part of Indian Income Tax, is designed to expedite and efficiently collect tax from the income generation process while reducing tax evasion. In this article, we will discuss about TDS and how to make TDS payments online, which is an important tax mechanism for all taxpayers in the country.

How does tax deduction at source work?

TDS is deducted at the source of an individual's income. The income may be in the form of professional fees, salary, commission, interest or even rent. According to the Income Tax Department, "TDS should be deducted at source by any individual (withholding agent) who is liable to make payments of a particular nature to another person (......)."

After deducting the TDS, the payee receives the net amount. The deductor then remits the TDS to the account of the Central Government.

The Collector uses TDS as a credit against its ultimate tax liability. The payee can claim credit of TDS under Form 26AS or TDS certificate (Form 16/Form 16A). If the tax liability is reduced after computation of income tax, the taxpayer will get refund of income tax paid by TDS.

What are the rates of TDS and how are they applied?

TDS tax rates vary according to the different classes and types of income. Taxes are deducted at the rates specified in the provisions of the relevant income tax laws or in the First Schedule of the Finance Act.

For example, in case of non-resident individuals, the income tax rules will also take into account the tax rates set in the DTAs.The TDS schedule will help taxpayers in assessing the tax rates on fixed payments. The withholding agents will have to pay the TDS to the government account within the stipulated period.

Online TDS Payment Process

You can make your tax payment online by following the steps below.

Visit the NSDL website and select "Services" > "Online Payments: Pay Taxes Online" or select the "Pay Taxes Online" tab. You need to provide a valid online payment link to make online payment of tax. Select the applicable online payment voucher "Voucher Number" in the TDS/TCS section. Thereafter, you will be directed to the online payment page where you can make online payment of TDS.