Tax Challan

By | July 29, 2015
(Last Updated On: July 29, 2015)


MASTER CIRCULAR DGBA.GAD. NO.3/42.01.034/2015-16, DATED 1-7-2015

This circular may be downloaded from  website

Tax Challan (Extract of circular)

Mandatory Electronic Payment of Tax by Certain Categories of Taxpayers

CBDT has made electronic payment of taxes mandatory for the following categories of taxpayers:

  1. A Company
  2. A person (other than a company) to whom provisions of Section 44AB are applicable

Banks may, therefore, instruct their branches:

(a)         to identify the status of the corporate taxpayers from the name. The 4th digit of PAN of all corporate asseessee would be “C”. Hence physical challans from such asseessee should not be accepted across the counter.

(b)         to accept physical challans at the bank counters from taxpayers under Section 44AB of IT Act as the responsibility of making e-payment rests primarily with the taxpayers.

(c)         to make available acknowledgement for e-payment immediately on the screen.

(d)         to ensure that the transaction id of e-payment is reflected in the bank’s statement.

(e)         to display on its e-payment gateway page, the official/s to be contacted in case the taxpayer faces any difficulty in making the payment, completing the e-payment transaction, generating the counterfoil etc.

(f)          to give ITD and NSDL e-Governance Infrastructure Limited, a list of officials with contact particulars to be contacted if required for any problems faced by ITD or tax payers.

Cut off time for e-Payment transactions pertaining to Government Revenue

Payment under OLTAS received up to 8.00 p.m. by agency banks may be treated as received on the same day and those received thereafter be treated as received on next working day.

With a view to improving customer service to direct taxpayers, special attention was drawn to the following provisions of ‘Accounting System for Direct Taxes’ :-

(i) Issue of Token : While instructions issued by Reserve Bank regarding the issue of paper token as an acknowledgement of payments are very clear, it is observed that a large number of authorised branches do not issue such tokens. In many places, there are informal arrangements wherein the taxpayer is asked to collect the challan after a specific date from the bank branches. In some cases, the receipted challans are not kept securely and are placed in an open box. The customers are allowed to freely pick up their challans without any identification. In the case of challans deposited with cheque or draft, the receipted challans will be issued on realisation of the amount of cheque or draft and hence the paper token should indicate the date on which the receipted copies of the challans would be kept ready so that the assessee makes an arrangement to collect the receipted challan on the date given in the token.

(ii) Receipted Challan : The receipted challan should be made available to the assessee within 4-5 days, based on the local clearing arrangements. The branches should ensure that this stipulated waiting period must not be exceeded and any deviation in this regard will be viewed seriously by Reserve Bank. The receipted challans should be handled with care and in a secured manner till they are handed over to the assessee across the counter on presentation of the relevant paper token. Under no circumstance, the receipted challan should be kept in open box accessible to customers.

(iii) Double Date Stamp on Receipted Challan: It is reiterated that the challan should bear two dates i.e. the ‘Date of tender’ of challans and instruments and the ‘Date of realisation’ of proceeds of the instruments as specified in Annexure-V of the Pink Booklet published by the Reserve Bank of India.

(iv) Acceptance of Clearing Cheques: It is observed that some of the banks are reluctant to accept cheques drawn on other banks while receiving taxes resulting in practice of Chartered Accountants/Tax Consultants tendering their own cheques on behalf of their clients. As accepting cheques drawn on other banks will greatly facilitate the customers, banks are advised not to turn back customers who tender challans with cheques drawn on other banks.

(v)  Do’s and Don’ts: A list of Do’s and Don’ts as given in the Annexure-IV of the Pink Booklet were not being supplied to the bank staff dealing with the Direct Tax collection work as required. The same may be issued to the branches.

Banks were advised of the following critical shortcomings which were brought to the notice of RBI by Directorate of Income Tax:

(a)            Non capture of PAN/TAN by banks – It had been reported from many centres that even where the taxpayer has correctly quoted his PAN in full, certain bank branches were either not entering it or were entering it in an incomplete manner. In this connection, banks were advised that under the On-line Tax Accounting System (OLTAS) procedure/rules, it had been laid down that wherever the 10 digit PAN/TAN in the proper alpha numeric structure is quoted by the taxpayer the banks would only have to capture the PAN and the name of the taxpayer and not the address.

(b)            Non capture of the full name of the taxpayer – Perusal of the data uploaded to TIN indicated that many bank branches are still putting one or two characters in the name column of the taxpayer. In some cases even symbols and dots were used. Banks may please ensure capture of taxpayer’s full name in OLTAS data.

(c)             Incorrect address field – The data analysed also reveals that the address field was not being captured properly by many bank branches. In many cases, just a few random alphabets or numbers were being entered which again indicated that the bank branches were not taking adequate care for full data capture. Banks were advised to take necessary corrective action.

(d)            Wrong reporting of Challan Identification Number (CIN) – Some bank branches were allotting a particular Challan Identification Number (CIN) on the taxpayer’s counterfoil but entering a different CIN on the OLTAS data sent. As per OLTAS procedure/rules, CIN was to be allotted on date of presentation only. The CIN Number stamped on the taxpayer’s counterfoil as well as on the main body of the challan should be transmitted to TIN.

(e)            Non uniform scroll data – As per the On-line Tax Accounting procedure/rules, the scroll of a Nodal Branch for a particular day is to be identical for both the ZAO as well as for the data transmitted on OLTAS to TIN. It was clarified that all collection data being sent to ZAO and TIN for a particular day must match both in respect of number of challans and major heads. Further banks were advised to ensure that each and every challan record is sent to TIN by every branch where collection has been made.

Challans tendered with Cash

A challan tendered with cash, if found in order after scrutiny, will be stamped ‘CASH RECEIVED’. The bank will also stamp both the main portion and the taxpayer’s counterfoil of the challan with a stamp mentioning the name of the bank & branch, the BSR code of the branch (7 digits), date of deposit (DDMMYY) of the amount and unique serial number of the challan (5 digits). The stamp will be impressed on both the main portion as well as the taxpayer’s counterfoil of the challan. Care must be taken to ensure that the impression of the receipt stamp is clear and legible.

An authorized official of the branch will sign in full the taxpayer’s counterfoil of the challan and initial the main copy of the challan having received the amount. In the taxpayer’s counterfoil, the amount received will be indicated in both words and figures. The receipted taxpayer’s counterfoil will be returned to the tenderer and the main copy will thereafter be passed on for scrolling in the Receipt scroll.

 Challans tendered with Cheque/Draft

A challan tendered with cheque/draft will be branded with a ‘double date stamp’ to indicate the date of tender of the instrument as well as the date of realization thereof. It may be possible that some branches might be following the practice of branding the challans with an inward date stamp as soon as the challans are tendered over the counter. In that case the double date stamp may not be necessary. However, it will be ensured that the inward date stamp is invariably branded on both the main copy and the taxpayer’s counterfoil of the challan.

The checking official will initially ensure that there is no difference between the amount of cheque/draft and the amount recorded in the challan by the tenderer. The cheque/draft will thereafter be sent for realization. Subsequently, on realization of the cheque/draft, the date of realization will be indicated on the double date stamp or in the space in the challan as the case may be. The bank will also stamp both the main and the taxpayer’s counterfoil of the single copy challan with a stamp mentioning the name of the bank & branch, the BSR code of the branch (7 digits) date of deposit (DDMMYY) of the amount and unique serial number of the challan (5 digits). After signing the challan for having received the amount, the taxpayer’s counterfoil will be returned to the tenderer against the surrender of the token.

Numbering of Challans

Running serial number will be given for all the challans (both paid by cash and by cheque) for each day. It must be ensured that the serial number on each challan issued on a particular day should be unique to trace it subsequently. The bank must therefore ensure that the serial numbers given to the challans deposited with cash do not overlap with the serial numbers given to the challans against which cheques have been realised on that day.

Counterfoil of the challans tendered along with cash and cheque/draft payable at the same branch will be returned to the tenderer duly receipted at the counter. The challans tendered with cheques/drafts drawn on a different branch of the same bank or any other bank situated at the same centre, the tax-payer’s counterfoil will be returned duly receipted not later than the working day following the day fixed under the Rules of ‘Local Bankers’ Clearing House’ for return of unpaid instruments of any day’s clearing.

 In case of challans tendered with cheque/draft, the date of realization of the cheque will also be stamped on the main portion of the challan, which will be retained at the bank for onward transmission to Zonal Accounts Office (ZAO) along with the Receipt Scroll. Although as per the Income Tax Act the date of presentation of cheque/Demand Draft realized will be treated as date of payment of tax, the cheque/Demand Draft will be scrolled only after realization.

Loss of Counterfoil by the taxpayer

In the event of loss of receipted challan counterfoil by the depositors, the bank branches may, on receipt of a specific request in writing for issue of a certificate of credit from assessees, issue the same to the depositor based on their record after satisfying themselves about the bonafides of the applicant in each case and may charge a nominal fee at its discretion. The certificate should mention the challan details i.e. amount, bank name and branch, BSR Code and Date of Deposit of cheque/cash, major head, challan serial number, date of realisation of cheque/date of deposit of cash and Collecting branch scroll number and date on which details oftax payment have been transmitted earlier.

Transmission of Error Records (para 2.6)

In case of any error by the collecting bank branch in reporting the amount of payment made by a taxpayer or major head of payment, the bank will transmit the corrected information on-line to TIN through an error record, the format for which will be as prescribed by the Income Tax Department. Rectification of the errors in the amount and the head of account will also be reported to ZAO through ‘Error Scroll’ to be sent through Nodal branch. Only the amount of tax payment as reported by the bank to the TIN will be accepted by the Income TaxDepartment as the payment made by the taxpayer.

Redressal of public grievances

Each Authorised Bank should have an effective procedure for dealing with public complaints at the branches rendering service to Government Departments or members of the public as prescribed, from time to time. In case the bank detects a mistake in reporting of a tax payment or the major head of tax payment, either suo moto or being brought to its notice by the tax payer, the bank will promptly transmit the error record (as described earlier at paras 2.6 and 7.4) to TIN. This is imperative as the Income Tax Department will give credit to a taxpayer on the information transmitted by the bank to TIN.

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