The Income-tax Act, 2025 brought in a new challan for and , ITNS 281N. The old ITNS 281 still exists, but only for tax deducted under the 1961 Act, which means up to 31 March 2026.
The challan takes a few minutes. The care goes into four choices on it. They decide which account the money is credited to. A wrong one can come back months later as a default notice for tax you did in fact pay.
Before you start
- Your TAN (tax deduction and collection account number) and its e-filing password. Monthly TDS is paid from the TAN login, not the PAN (Permanent Account Number) login.
- The month's TDS payable account, split by section and by payee: company or not, and resident or not. Each combination needs its own challan.
- A way to pay: net banking, a debit card or UPI; or RTGS/NEFT or a bank counter, using a challan generated on the portal. The portal shows the options your bank supports.
The steps
- Log in to the e-filing portal at incometax.gov.in with your TAN as the user ID.
- Go to e-File, then e-Pay Tax, and choose New Payment. When asked, pick the Income-tax Act, 2025 and 2026-27.
- Choose the Pay TDS/TCS tile.
- Say whether the payee is a company or not, and whether they are resident or non-resident.
- Choose the type of payment. For the ordinary monthly deposit this is 200: TDS/TCS payable by taxpayer.
- Add each nature-of-payment code with its tax. Put any interest or late fee in its own box, not in the tax box. One challan takes up to 20 codes.
- Choose how to pay, and pay.
- Download the challan receipt.
The four choices that decide where the money goes
1. Is the payee a company?
The portal asks about the payee, the person you deducted from, not about you. A company paying a consultant's TDS answers “not a company”, because the consultant is not one. The answer sets the major head: 0020 for company payees and 0021 for everyone else. This is the most common mix-up, because it feels as though the head should describe the business paying.
2. Resident or non-resident
Payments to residents and non-residents go on separate challans, with their own codes. If you deducted tax from both residents and non-residents in a month, you need two challans.
3. Type of payment
Use 200 for your own monthly deposit. 400 is only for paying a demand the Income Tax Department has raised against your TAN, for example after processing a statement. The other options on the list are for PAN-based demands and other receipts. A routine deposit made under 400 may not be available for your statement.
4. Nature-of-payment code
Each kind of payment now has a four-digit code set by the portal. Some old sections are split into several codes: contractors who are individuals and those who are not, professional fees and technical fees, rent of buildings and rent of machinery. Choose by the description in the list, and make sure it matches the section you will report for that payee in the quarterly statement. If they differ, the challan shows as unmatched and the statement shows a short payment.
After you pay
- The receipt shows three things you will need in the quarterly statement: the BSR (Basic Statistical Return) code of the bank branch, the date of deposit and the challan serial number. Together they make up the Challan Identification Number (CIN).
- Match the amount paid to the TDS payable account for the month, and file the receipt with the month's papers.
- If you paid late, pay the interest before you file the statement: 1.5% a month from the date of deduction to the date of payment, counting part of a month as a whole month.
Common mistakes
| Mistake | What it leads to |
|---|---|
| Choosing company or non-company by the payer instead of the payee | The challan does not match the statement, and a short payment is shown |
| Type of payment 400 for a routine deposit | The payment may not be available to use in the statement |
| Paying new-law TDS on the old ITNS 281, or the wrong tax year | The challan cannot be used against the right year's statement |
| A code that differs from the section in the statement | The rows show as unmatched, and a default notice follows |
| Interest or late fee entered as tax | The interest stays unpaid, and keeps running |
| Paying monthly TDS from a PAN login | The payment is not linked to your TAN, so your statement cannot use it |
If a challan has gone wrong
- Not yet used in a statement: correct it on TRACES (tdscpc.gov.in) through the online challan correction. The year, the major head, the minor head (type of payment) and the nature-of-payment code can be changed, and requests are usually processed in 24 to 48 hours.
- Moving a payment to or from a non-resident section needs approval from your TDS officer. It cannot be done online.
- Already used in a statement: correct the statement instead, by filing a correction statement.
- The “Challan Correction Request” on the e-filing portal is for PAN challans such as advance tax. TDS challans paid under a TAN are corrected on TRACES.
If you do not have a TAN: Form 141
Some deductors do not need a TAN: a buyer of property from a resident seller; a resident individual or HUF (Hindu undivided family) buying property from a non-resident seller; and an individual or HUF not liable to tax audit who pays rent, or large contract or professional fees. They pay and report in one step with , from their PAN login, within 30 days from the end of the month in which they deducted. Any other buyer of property from a non-resident still needs a TAN. The TDS & TCS Checker tells you whether a payment falls here.
Before relying on this article: the steps and field names follow the Income Tax Department's material as of September 2026. The portal's screens and codes are updated from time to time, so follow what the portal shows on the day you pay.
