ITNS 281 Challan: How to Pay TDS Online — Step-by-Step Guide (2026)

ITNS 281 Challan: How to Pay TDS Online — Step-by-Step Guide

Every rupee you deduct as TDS must be deposited with the Central Government before you can file your TDS return or issue a certificate to your deductee. The instrument for this deposit is ITNS 281 — the single challan used for all TDS and TCS payments in India.

Getting this right matters. Wrong minor head code, wrong assessment year, wrong TAN — any of these errors can result in your TDS deposit not being matched to your return, causing your deductees to lose credit in their Form 26AS and triggering notices to you.

What Is ITNS 281?

ITNS 281 is the official challan prescribed by the Central Board of Direct Taxes (CBDT) for depositing:
- TDS (Tax Deducted at Source) on salary and non-salary payments
- TCS (Tax Collected at Source) under Section 206C

It is not used for advance tax, self-assessment tax, or any other direct tax payment (those use ITNS 280).

When Must TDS Be Deposited?

TDS deducted in a given month must be deposited by the 7th of the following month. The exception is March — TDS deducted in March can be deposited up to 30 April.

Interest for late deposit: 1.5% per month (or part of month) from the date of deduction to the date of deposit under Section 201(1A). This is in addition to any late filing penalty on the quarterly return.

Step-by-Step: How to Pay TDS Online

Navigate to the e-Pay Tax section on incometax.gov.in (TIN 2.0). The older NSDL challan portal still works for legacy payments, but most new filings now go through the updated Income Tax Department interface.

On the e-Pay Tax screen, select ITNS 281 from the challan list. Do not select 280 (advance/self-assessment tax) or 282 (securities transaction tax).

Enter your TAN (Tax Deduction Account Number) — the 10-character alphanumeric identifier assigned to you as a deductor. TRACES uses TAN to match the challan to your returns. An error here means the deposit floats unmatched.

Choose the correct Major Head:
- 0020 — Company deductors
- 0021 — Non-company deductors (individuals, HUFs, LLPs, partnerships, etc.)

This is the most critical and most commonly misapplied field:

Always use Minor Head 200 for routine TDS deposits. Minor Head 400 is only for demand-driven payments. Using 400 for routine deposits creates processing errors.

Select the Assessment Year (AY), not the Financial Year. If you are depositing TDS for transactions in FY 2025–26 (April 2025 – March 2026), select AY 2026–27.

This is the second most common error. Depositing under the wrong AY mismatches the challan from the return.

Break down the total TDS by section. For example:

The portal aggregates these into one payment, but the section-wise breakdown is used when matching to your quarterly return.

Choose your bank from the list of authorized banks (all major public and private sector banks are available). You will be redirected to the bank's net banking interface. Complete the payment.

On success, the portal generates:
- BSR Code — 7-digit branch code of the bank
- Date of Deposit
- Challan Serial Number — 5-digit unique identifier

Save these three details. They are required when filing your quarterly TDS return to link the payment to the return.

After payment, immediately download the PDF challan counterfoil. It contains the BSR code, date, and serial number. This is your proof of deposit — keep it for at least 7 years.

How HelloBooks Pre-fills ITNS 281

When you record vendor payments and salary journals in HelloBooks:

1. TDS is automatically computed based on the section, threshold, and PAN. A higher rate of 20% applies automatically for missing or invalid PAN.
2. Monthly challan summary is generated in the TDS module showing total deductions by section.
3. ITNS 281 is pre-filled with your TAN, Major Head (0020/0021 based on your entity type), Assessment Year, and section-wise breakdowns.
4. You review, confirm, and click through to the bank portal for payment.
5. After payment, you enter the BSR code and challan serial number back into HelloBooks — these are stored against each payment for quarterly return filing.

Common Mistakes and How to Avoid Them

Wrong Minor Head (400 instead of 200). Use 200 for all routine deposits. 400 is only for assessment demands.

Wrong Assessment Year. Always verify: FY 2025–26 → AY 2026–27. A wrong AY means the challan sits unmatched in TRACES until corrected via a challan correction request — a manual process that takes weeks.

TAN not pre-filled or incorrect. A typo in TAN causes the payment to be unidentifiable. TRACES will not auto-correct this.

Not saving BSR + Challan Serial Number. Without these, you cannot link the challan in your quarterly return, causing unmatched deposits and Form 26AS errors for deductees.

Depositing under wrong section split. If you pay ₹10,000 TDS against 194J but enter it under 194C in the return, the matching fails even though the total challan amount is correct.

Late deposit but filing the return anyway. The return is accepted, but the late deposit interest (1.5%/month) is separately computed and may trigger a demand notice.

Challan Correction — What to Do If You Make an Error

TRACES allows challan corrections for a limited period (typically within 7 days of payment for online corrections, or up to 30 days via the bank). Corrections possible:

• Assessment Year
• Major Head / Minor Head
• TAN

After 7 days: File a challan correction request at the bank where payment was made. The bank forwards it to NSDL/TRACES. This process takes 3–4 weeks and requires the original counterfoil.

Frequently Asked Questions

Can I pay TDS in cash?

No. TDS deposits above ₹10,000 must be made electronically via net banking through an authorized bank. Below ₹10,000, a physical challan at the bank counter is technically allowed but rarely used in practice.

What if I miss the deposit deadline?

Deposit immediately. Interest at 1.5% per month runs from the date of deduction — do not wait until the quarterly return due date. The interest compounds on every day of delay.

Can I use one challan for multiple sections?

Yes. A single ITNS 281 payment covers all sections for a given period. You enter the section-wise breakup on the challan, and the total is one payment. In your quarterly return, each section maps to the same BSR code and challan serial number.

Is ITNS 281 applicable for TCS too?

Yes. ITNS 281 covers both TDS and TCS. When paying TCS collected under Section 206C, use the same challan with the applicable minor head.

What is the BSR code and where do I find it?

BSR (Basic Statistical Return) code is a 7-digit code assigned by the Reserve Bank of India to every bank branch. It appears on your payment counterfoil and in the bank's transaction confirmation. You must quote it exactly when linking the challan to your TDS return.