OLTAS is an acronym that stands for Online Tax Accounting System. It primarily collects direct taxes from relevant individuals, businesses, or organisations. The Income Tax Department’s strategy is collecting information and recording all tax payments made through banks by uploading the challan details online. OLTAS Challan streamlines the tax collection process.
Benefits of OLTAS
- The old model, in which taxpayers had to fill out four challans, has been replaced by OLTAS. With the introduction of OLTAS, only one challan is required.
- OLTAS has simplified the process of obtaining tax payment acknowledgements from bank branches.
- The Challan Identification Number can be used to instantly verify the evidence of tax payment (CIN).
- All information and details about the taxpayer’s tax payments are available online. To check his tax details, the taxpayer must log in to TIN-NSDL (https://www.tin-nsdl.com/) and enter the CIN he received from the bank.
- Following the implementation of OLTAS, taxpayers are no longer required to submit copies of the challan or acknowledgement with their tax returns. Only the CIN must be included with the tax returns.
Why Was OLTAS Introduced?
To remove the constraints that hampered manual tax collection, Dr Vijay Kelkar (Chairman of the Advisory Group on Tax Reforms) proposed that the Income Tax Department and the Reserve Bank of India collaborate to facilitate the transfer and collection of tax collections and refunds through online means.
To ensure that this procedure was carried out smoothly, the following bodies were tasked with cooperating to bring it to its logical conclusion:
- The Central Board of Direct Taxes
- The Indian Banks Association
- The Controller of Accounts
- The Reserve Bank of India
While OLTAS was initially designed to cover only corporate taxpayers, it later expanded its scope to include both corporate and individual taxpayers before wrapping all 32 member banks across India.
How Does OLTAS Work?
The Income Tax Department has developed a specific file format for uploading tax payment data. When it comes to the generation, and transfer of any tax-related information or data, all participating banks and their branches must use this format. Following the preparation of the file in the outlined format, the NSDL’s File Validation Utility (FVU) can be used to ensure that the file structure is correct and proper.
According to OLTAS, the taxpayer will only use a standard single copy challan for the following:
- Challan Number ITNS 280 for corporate taxes as well as regular income tax
- Challan Number ITNS 281, which is required for depositing all TDS and TCS
- Challan Number ITNS 282 is required for paying the following taxes:
- Gift Tax
- Wealth Tax
- Hotel Receipts Tax
- Estate Duty
- Securities Transaction Tax
- Expenditure Tax
- Any other direct tax
- Challan Number ITNS 283, which is required for any taxes relating to fringe benefits or banking cash transactions
After the bank has stamped the challan, the taxpayer will receive the tear-off section, which will contain a unique Challan Identification Number (CIN). The CIN includes the following information:
- The bank’s BSR Code is a seven-digit number. This code refers to the bank where the taxpayer deposited the tax.
- The date on which the challan was presented
- The bank’s five-digit serial number of the challan presented to the taxpayer that day.
OLTAS is a system that was implemented to collect, account for, and report Direct Tax payments from various taxpayers. OLTAS transactions are processed online through a network bank branch. If the taxation system interests you, here’s some information about the types of GST