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A small-business owner pays TDS but does not know which challan details must be copied into the return or given to vendors.
The BSR code, deposit date and challan serial number form the CIN. The return quotes the CIN for each deduction; the department matches the two to post the vendor's credit.
A challan register: TAN, tax year, payment code or section, amount, BSR code, date, serial number, and the months and vendors it covers.
Every deduction in the return points to a real challan and the vendor's credit appears.
ITNS 281 is the challan used to deposit TDS. Three identifiers on it, the BSR code, the deposit date and the challan serial number, together form the Challan Identification Number (CIN). That CIN links the payment to your quarterly return and, through it, to the vendor’s credit.
The fields on a TDS challan
| Field | What it means | Where it must match |
|---|---|---|
| TAN | Your deductor number | Your quarterly return |
| Assessment year or tax year | The year the deduction relates to | The return for that period |
| Major head | Company or non-company deductee | The type of deductee in the return |
| Minor head | TDS payable by taxpayer, or regular assessment | Normal monthly deposits use the TDS payable minor head |
| Nature of payment | Section (up to March 2026) or payment code (from April 2026) | The ledger and the return line |
| Amount | Tax, plus any interest, fee or penalty shown separately | Your TDS Payable ledger |
| BSR code | 7-digit code for the receiving bank branch | The return |
| Date of deposit | Date the bank received the money | The return |
| Challan serial number | 5-digit number given by the bank | The return |
What is the difference between challan 280 and challan 281?
Challan 280 is for your own income tax, such as advance tax or self-assessment tax. Challan 281 is for TDS and TCS you deducted or collected from others. If TDS is paid on challan 280, it sits as your own tax payment; the TDS return has no challan to point to, and the vendor sees no credit. Fixing it is slow.
Worked example
You deduct ₹10,000 TDS from a consultant’s April fee and deposit it on 6 May. The challan receipt shows:
- BSR code: a 7-digit number, for example 0510308 (illustrative)
- Date of deposit: 06/05
- Challan serial number: a 5-digit number, for example 00417 (illustrative)
- Nature of payment: professional fees, payment code 1027
- Amount: ₹10,000
When you prepare the quarterly return for April to June, you enter these same three identifiers against the ₹10,000 deduction for that consultant’s PAN. The department matches them to the bank’s record. If one digit is wrong, the match fails and the vendor’s credit does not appear.
How do you confirm the bank has credited the deposit?
- Download the challan receipt from the e-filing portal or your bank right after payment.
- Check the CIN, amount, TAN and nature of payment against what you intended.
- Later, check challan status in the portal’s or TRACES’s challan status service to confirm it is recorded and how much of it has been used in returns.
Many businesses pay one challan per nature of payment each month, for example ₹24,000 under 194C for contractors, ₹10,000 under 194J for professionals and ₹5,000 under 194H for commission (up to March 2026), with salary TDS under 192 on its own challan. Keep a challan register so you know which month and which vendors each challan covers.
What to read next
- Next in the series: How deducted TDS becomes a credit in Form 26AS: the four documents
- TDS challan mismatch resolution
- Form 141 unified challan statement
TransactIG reconciles TDS and matches each challan payment in the bank statement to the TDS Payable ledger. See TDS reconciliation software and reconciliation software for India.