Online Tax Accounting System or OLTAS is a system that is used to collect direct taxes from individuals, organizations and companies. It is the strategy of the Income Tax Department to get information. By uploading the challan details on the website, IT department is able to keep a record of all the taxes that have been paid through banks. With the following objectives, OLTAS was launched in April 2014:
- Accounting of direct taxes online
- Collection of direct taxes online
- Reporting receipts and payments of direct taxes online
Reasons for Introduction of OLTAS
Prior to the introduction of OLTAS, tax collection was a manual process done by the banks and their branches. This process was extremely difficult, long and was full of errors. There was a need to deal with such issues of the manual system. Thus, the Chairman of the Advisory Group of Tax Reforms, Dr. Vijay Kelkar gave recommendations to ensure that the Reserve Bank of India and the Tax Department will work in coordination to simplify the collection and transfer of tax and refunds online, without any manual intervention.
To ensure that the recommendations were followed and the process was carried out without any problems, the following bodies were asked to work in tandem:
- The Central Board of Direct Taxes
- The Controller of Accounts
- The Indian Banks Association
- The Reserve Bank of India
OLTAS was introduced when these bodies worked together and it was implemented in three phases.
This phase was conducted from 9th June to 15th July, 2003. It involved selected branches of 15 public sector banks in the four metro cities – Delhi, Mumbai, Kolkata and Chennai
Conducted from 1st September to 15th November, 2003, more cities were involved, which included Bangalore, Ahmedabad, Pune and Hyderabad.
This phase was carried on from 1st December 2003 to 31st May 2004. In this phase, 4 Private Sector Banks namely, HDFC, ICICI, UTI and IDBI joined in. The other 12 banks also joined the project which made it a total of 32 banks, including the apex bank of the country, Reserve Bank of India.
In the initial stages, the only component in the scope was the data which was related to tax information. However, after April 2005, the project went online and now the job of the banks was to reconcile the information and data received by TIN from the banks with the daily tax collected. TIN is the Tax Information Network and is set up by the National Securities Depository Ltd., to manage all the data and information about challans between the tax department and the banks.
For the data of tax payment which needs to be uploaded online, there is a detailed format provided by the Income Tax department. Each of the 32 banks are required to follow this format for any information that they need to exchange or generate with respect to taxes. After the files have been made in the specified format, the NSDL provides a FVU i.e. File Validation Utility. This is used to validate if the file has been made in a proper manner.
The taxpayer, as per OLTAS, has to use a single and common challan for the following:
- Challan Number ITNS 280 for regular income tax and corporate taxes
- Challan Number ITNS 281 for the deposit of TCS and TDS
- Challan Number ITNS 282 for the payment of direct taxes like wealth tax, gift tax, estate duty, hotel receipts tax, securities transactions tax and expenditure tax.
- Challan Number ITNS 283 for any taxes which relate to cash transactions in the bank or fringe benefits
The tear off section of the Challan contains the CIN number, details of the bank, date and the serial number. The bank needs to stamp the tear off and this has to be given to the tax payer. This CIN is also a proof that the tax payer had paid the taxes and thus, this needs to be filed along with the Income Tax Returns every year. The Challans are available online and at the local tax office.
For the common tax payer, the OLTAS has many benefits. Some of them are:
- It is easy. In fact, with OLTAS, it has become simpler for the tax payer to get their acknowledgements of tax payment from the banks
- The old system has been replaced by OLTAS. Now, the tax payer only needs to fill one challan as opposed to the four that had to be filled in the earlier times
- All details and information about the tax payments are available online and can be checked easily. To check these details, the tax payer has to use the CIN number to log onto TIN NSDL.
- With the use of CIN, the evidence of tax payment can be checked easily.
- Now in the tax returns, the tax payer only needs to write his CIN. There is no need to send all the documents while filing his returns.
With the help of the Tin i.e. the Tax Identification Number, a taxpayer can check the status of their OLTAS challans online and also make any enquiry, if needed. All the tax information is consolidated under the PAN card and name of the tax payer. With the help of this facility, they can access it anytime. Also, this enables the banks to update the status of the challans that they upload while collecting the taxes.
There are various search tools available. One can use any of these to check the status of their challans online. Some of them are:
If the tax payer is able to enter the date range in which the bank might have uploaded the challan along with the TAN, then they can get the following information online:
- The CIN i.e. Challan Identification Number
- The minor and the major head code
- Details of the payment, including how was it made
When the tax payer enters the tax amount and the CIN, they can get the following information:
- The name of the tax payer
- The BSR code of the bank
- The serial number of the challan
- The date on which the deposit was made
- The major head code and a description
- The PAN and the TAN of the tax payer
- The date on which the TIN received the challan
- Verification of the tax amount
Till the systems were not improved and digitalized, the taxes had to be collected by banks and all the information had to be consolidated manually. This process was not only cumbersome but took too much effort and time. Another major disadvantage of this manual method was that many times, this would lead to errors causing problems to the tax payer. With the new system, the banks have to use OLTAS and this has eased out the process considerably. This, undoubtedly, is more efficient and there are fewer chances of any errors.
For a tax payer who wants to make online tax payment, it is pre-requisite that he/she has a bank account with one of the banks who use the OLTAS system. With e-payment of taxes, the banks can easily take payments and consolidate reports and of course, it is simple for the tax payer as well. The banks that offer the OLTAS system are:
- Andhra Bank
- Allahabad Bank
- Bank of Baroda
- Axis Bank
- Bank of Maharashtra
- Bank of India
- Central Bank of India
- Canara Bank
- Corporation Bank
- HDFC Bank
- Dena Bank
- IDBI Bank
- ICICI Bank
- Indian Overseas Bank
- Indian Bank
- Jammu and Kashmir Bank
- Punjab National Bank
- Oriental Bank of Commerce
- State Bank of Hyderabad
- State Bank of Bikaner and Jaipur
- State Bank of India
- State Bank of Patiala
- State Bank of Mysore
- State Bank of Indore
- State Bank of Travancore
- UCO Bank
- Syndicate Bank
- United Bank of India
- Union Bank of India
- Vijaya Bank
The tax payer has the option to pay the taxes online via net banking or by cash or cheque or demand draft. All these ways are acceptable and easy. But the only condition is that the bank can use the OLTAS to accept payments.
The following steps have to be followed for e-payment of taxes:
- The tax payer will need to choose one of the following challans that will be relevant to him. The different challans are ITNS 280, ITNS 281, ITNS 282, ITNS 283. The usage of these challans has been mentioned earlier.
- Once the applicable challan has been selected, the tax payer needs to enter their PAN or TAN number. After this, an online verification has to be done, which will ensure that the details entered are correct or not.
- If the TAN or PAN is valid and the verification is done, the tax payer needs to enter some information related to the challan. The information needed at this stage is the name and address of the tax payer, the account head under which the tax was paid, the bank of the tax payer where the tax will be paid and some other details.
- After this information is submitted, it is displayed on the screen which needs to be confirmed by the tax payer. Post the verification, the tax payer is automatically routed to the net banking page of the bank.
- Once the tax payer reaches the internet banking page of the bank, he/she will need to log in to their internet banking and then the payment information can be entered.
- After the tax has been paid, on the screen he/she will be able to see the counterfoil of the challan which is a proof of the tax payment and will have details of the payment, CIN and name of the bank
If a tax payer is not comfortable making the payment online, they also have the option to pay at the banks using the OLTAS system. The tax can be paid in cash or through a cheque or a demand draft. When the tax payer pays the tax in cash, the bank immediately tears the counterfoil from the challan which has the CIN number and hands it to the payee.
If the payment is done be means of demand draft or cheque, the same needs to be issued in the name of the bank collecting the tax. The counterfoil in this case will be handed over to the tax payer once the payment has been received by the bank. The date on the challan will be the date of submission and not of realization.
The Tax System of India has come a long way since the time of its inception. From all processes and procedures from being manual and full or human errors, it is now a digitalized and online system. OLTAS or the Online Tax Accounting System is one of the initiatives of the Tax Department which has enabled the banks to collect taxes and upload the challans online. From the tedious and cumbersome process, it is now an efficient system which avoids any excessive uses of paper as everything is done online. Also, there are very less chances of any kind of errors.
As the system stands today, it is easy for a tax payer to access information relating to his taxes online. It is also very easy for the banks to consolidate all information and send it to the tax department. OLTAS has made the tax payment and collection very easy and convenient for everyone involved. This also helps the tax department to keep a track on all transactions and the chances of anyone defaulting is also less. The OLTAS definitely has changed the tax system of the country along with other similar initiatives.