Online Tax Accounting System From 01.06.2004

From 1.6.2004 the Income-tax Department will introduce a new system for payment of taxes called Online Tax accounting System (OLTAS). This system will not only simplify the procedure for payment at the collecting branches of designated banks it will be a breakthrough in accounting of direct tax payments. All collecting branches of various banks have been networked and integrated with Tax Information Network (TIN) and Income Tax Department. The taxpayer friendly features of OLTAS include a single copy challan-cum-acknowledgement form instead of the present four-copy challan. The new challan will have fewer fields that will require to be filled up. Every challan will have a unique identification number called Challan Identification Number (CIN). With the help of CIN and PAN every payment will be uniquely identified resulting in correct credit for payments by taxpayers and online transmission of details of tax payments to the Income Tax department will result in faster credit. Further, it will not be necessary to enclose a copy of challan along with the return of income. More details of OLTAS will be soon made available on this website.

Some features of new Online Tax Accounting System (OLTAS) to be introduced by Income Tax Department from 1 June 2004.

As present there are seven different types of challans for depositing direct taxes into the government account. These will be replaced by three types of challans : (i) A common single copy challan No. ITNS 280 for payment of Income tax, Corporation tax and Wealth tax ;(ii) A common single copy challan No. ITNS 281 for depositing Tax Deducted at Source from corporates or non-corporates; (iii) A common single copy challan No. ITNS 282 for payment of Gift-tax, Estate Duty, Expenditure Tax and Other direct taxes.

The collecting bank branch will put a rubber stamp on the challan and its counterfoil indicating a unique Challan Identification Number (CIN) comprising of seven digit BSR Code allotted by RBI to that bank branch, the date of deposit (dd/ mm/ yy i.e. six digits), and the challan serial number in 5 digits. CIN will, therefore, be unique for each challan through out the country and will be used for identifying the challan in the OLTAS.

The new single copy challans will have a main portion at the top and a 'taxpayer counterfoil' at the bottom. The bank will retain the main portion of the challan and return the 'taxpayer counterfoil' duly receipted to the taxpayer. Because there will be only one copy of challan it becomes extremely important that the challan is correctly filled and PAN of the taxpayer and PAN/ TAN of the deductor as the case may be, is correctly indicated in the challan, and that the right columns are ticked/ filled in the challan, and that the taxpayer collects a proper stamped acknowledgement from the banks indicating the Challan Identification Number (CIN) as indicated above.

The collecting bank will capture the entire data of the challan and transmit it electronically to the Income-tax Department. . The bank will send the paper copy of the challans alongwith printed scrolls to the Zonal Accounts Officers. The information received from banks will be used by the Department to give credit for the tax paid based on CIN.

Since the taxpayer will have only a counterfoil, the requirement to enclose proof of payment of pre-paid taxes with the return of income as contained in 'Explanation' to Section 139 (9) shall stand fulfilled if CIN of the challans for payment of self-assessment tax and Advance Tax is indicated in the return of income.

As the new scheme comes into force only from 1.6.2004, the challans for Advance Tax payments made upto 31.3.2004 and Self Assessment Tax paid upto 31.05.04 will not have CIN. Therefore, in respect of Advance Tax or Self Assessment Tax paid before 1.6.2004, the Assessing Officer's copy of the challan will have to be enclosed with the return. This will be necessary only in the current year, which is a switch over year.

Source: www.tin.nsdl.com