Finance Act 2005: New Tax Challans & OLTAS Changes

RBI/2005-06/39 DGBA.GAD.No.H-42 /42.01.034/2005-06 July 4, 2005 The Chairman & Managing Director All Agency Banks including Jammu & Kashmir Bank Ltd Dear Sir, Finance Act 2005- Changes in Major Head and Challans - OLTAS As you are aware, the Finance Act 2005 has introduced two new taxes i.e.  Fringe Benefit Tax  and  Banking Cash Transactions Tax . Consequently, certain changes /rationalization have been made to Major Heads and Sub-Minor Head of Accounts by Income Tax Department as under: I. CHALLAN NO.ITNS - 280 The Challan is for the payment of the two Major Heads i.e. (a) 0020 Income-tax on Companies (Corporation Tax) and (b) 0021 Income-tax (other than Companies). It should now be possible for taxpayers to pay taxes for assessment years other than consecutive assessment years. For example, in the case of assessments for block period (more than one consecutive assessment year), the assessment year field in the bank's software may be modified to accept payments for a period other than consecutive assessment year for example payments for A.Y. 1991-97, 1992-99, 1993-99 etc. II. CHALLAN No.281 The challan is meant for payment of TDS (tax deducted at source)/TCS (tax collected at source). It has two Major Heads i.e. (a) 0020 for company deductees and (b) 0021 for non-company deductees. The challan has two Minor Head Codes which are to be ticked by the tax payer (a) TDS/TCS payable by tax payer (Minor Head -200) (b) TDS/TCS on regular assessment (raised by Income-tax Department (Minor-Head - 400). The new 3 digit codes Sub-Minor Heads now introduced in the challan are as under : Section

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/39 · issued 04 Jul 2005. The plain-English explanation above is BankPulse’s own independent summary.

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