How TDS Is Paid Online: Challan 281 & e-Pay Tax (2026)

Every deductor who withholds tax at source must deposit that amount with the government within a fixed timeline, and the entire process is now handled electronically through the Income Tax e-filing portal. The old NSDL/OLTAS challan route has been largely replaced by the e-Pay Tax service, which pairs the familiar Challan ITNS 281 with a simpler, login-based workflow. This article explains how TDS is paid online, the due dates you must observe, and the payment modes available as of 2026.

Understanding Challan ITNS 281

Challan ITNS 281 is the prescribed challan for depositing Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). It is used by deductors to remit tax withheld from salaries, contractor payments, professional fees, rent, interest and similar payments, quoting the deductor’s Tax Deduction and Collection Account Number (TAN).

Historically this challan was generated and paid through the NSDL (now Protean) OLTAS system. Over the last few years the government has migrated tax payments to the e-Pay Tax service on the Income Tax e-filing portal, and for most deductors that portal is now the primary channel for creating and paying the challan.

One point to note for 2026: with the new Income Tax Act, 2025 coming into effect, a revised challan format known as ITNS 281N is being introduced for TDS/TCS payments from tax year 2026-27 onwards. Payments relating to the earlier Income Tax Act, 1961 continue to use ITNS 281. The online process on the portal remains essentially the same; only the underlying challan reference changes depending on the period and Act applicable.

TDS payment due dates for 2026

Timely deposit is central to TAN and TDS compliance, and the deadlines are strict. Interest and penalties apply automatically for late deposit, so it is worth committing these dates to memory.

• For tax deducted in the months of April to February, TDS must be deposited by the 7th of the following month.
• For tax deducted in the month of March, the due date is 30th April of the next financial year. This is the well-known March exception, giving deductors extra time at the financial year-end.
• For TDS on the purchase of immovable property (Section 194-IA), on rent under Section 194-IB, and certain similar sections, tax is generally payable by the 30th of the month following the month of deduction, using the applicable challan-cum-statement form.

Where the government itself is the deductor and tax is paid without production of a challan, the amount must be deposited on the same day. Most private deductors, however, will follow the 7th-of-the-month rule described above.

How to deposit TDS online through e-Pay Tax

The e-Pay Tax service allows a deductor to create and pay the TDS challan after logging in with the TAN. The steps below reflect the current process on the Income Tax e-filing portal.

1. Visit the Income Tax e-filing portal and log in using your TAN as the User ID, along with your password. TDS challans are created under the TAN login rather than the PAN login.
2. From the dashboard, go to the “e-File” menu and select “e-Pay Tax”.
3. On the e-Pay Tax page, click “New Payment” to begin creating a fresh challan.
4. Select the applicable tax payment tile, for example the tile for TDS/TCS on payments, and click “Proceed”.
5. Choose the relevant Assessment Year and the nature of payment, then fill in the type of deductee and the section under which tax has been deducted.
6. Enter the tax break-up, including the basic tax amount, along with any surcharge, cess, interest or late-payment fee, so that the total challan value is captured correctly.
7. Select your preferred payment mode and, where required, the payment gateway, then click “Continue”.
8. Review the challan summary carefully to confirm the TAN, assessment year, section and amounts, then click “Pay Now”.
9. Complete the payment. On success, you will receive a confirmation by email and SMS, and a challan receipt bearing the Challan Identification Number (CIN) will be generated.

Retain the challan receipt and CIN. You will need these details when filing the quarterly TDS return (Forms 24Q, 26Q, 27Q or 27EQ), where each deducted amount is mapped to the corresponding challan.

Modes of payment available

The e-Pay Tax service supports several payment modes, so deductors can choose the option that suits their banking arrangements.

• Net banking through authorised banks, with no additional transaction charge.
• Debit card of authorised banks, again with no transaction fee.
• Pay at bank counter (over the counter), allowing payment by cash, cheque or demand draft at an authorised branch; cash payments are subject to statutory limits.
• RTGS/NEFT, where the portal generates a mandate form that can be used to remit tax through any bank.
• Payment gateway, which accepts credit cards, debit cards, net banking and UPI. Transaction charges may apply on this mode over and above the tax amount, depending on the instrument used.

For deductors without a net banking facility at an authorised bank, the RTGS/NEFT and pay-at-bank-counter options ensure that payment is still possible. The payment gateway route is often the most convenient where UPI or credit-card settlement is preferred, but the applicable charges should be factored in.

Points to keep in mind

Accuracy at the challan stage prevents mismatches later. A few practical checks make the process smoother.

• Always verify the TAN, assessment year and section code before paying, since corrections after payment involve a separate challan-correction process.
• Include any applicable interest for late deduction or late deposit in the same challan to avoid short-payment notices.
• Keep separate challans where required, for instance for resident and non-resident deductees, so that returns reconcile cleanly.
• Download and archive the challan receipt immediately, as the CIN is essential for return filing and for the deductee to claim credit in Form 26AS/AIS.

Frequently asked questions

Do I need a TAN to pay TDS online?

Yes. TDS challans are created and paid under the TAN login on the e-filing portal. The main exception is TDS on the purchase of immovable property under Section 194-IA, where the buyer uses PAN and a challan-cum-statement rather than a TAN.

What is the difference between ITNS 281 and ITNS 281N?

ITNS 281 is the challan used for TDS/TCS payments under the Income Tax Act, 1961. ITNS 281N is the corresponding challan introduced for payments under the Income Tax Act, 2025, applicable from tax year 2026-27. The online payment steps are the same; the correct challan depends on the period and Act involved.

What happens if TDS is deposited after the due date?

Late deposit attracts interest at 1.5% per month or part of a month from the date of deduction to the date of payment. Persistent default can also lead to penalties and disallowance of the related expenditure, so timely deposit is important.

Can I pay TDS without net banking?

Yes. Apart from net banking, the portal supports debit card, RTGS/NEFT, pay at bank counter, and a payment gateway that accepts UPI and cards. This ensures deductors can pay regardless of their banking setup.

Is the old NSDL/OLTAS challan route still available?

Tax payments have largely shifted to the e-Pay Tax service on the Income Tax e-filing portal. Most deductors should now create and pay TDS challans through the portal rather than the older external route.

If managing monthly deposits, challan generation and quarterly returns feels demanding, TAXAJ can handle your end-to-end TDS and TAN compliance so that every payment is accurate and on time. Reach out to our team to keep your deductor obligations fully in order.