Online Tax Accounting System or simply OLTAS is a system which is used in the process of collecting direct taxes from individual and corporate tax payers. Basically, it is a department of Income tax which strategies to acquire information of the tax payers and maintains a record of all the tax. In April 2004, OLTAS was launched with the key objectives including:
· Collection of online direct taxes
· Accounting of online direct taxes
· Reporting of payments
· Maintaining the records or receipts of online direct taxes
Role of OLTAS:
Online Tax Accounting System was launched in order to keep a record of all the collection of taxes done by the Indian Government through banks. Earlier the records were controlled and managed in a manual way, which was cumbersome, time-consuming, and error-prone as well. Thus, to overcome such shortcomings linked with manual tax collection record management system, the advisory group on tax reforms under the Chairmanship of Dr. Vijay Kalkar, it was recommended to establish a network of income tax department, financial institutions (banks), and the RBI, in order, to facilitate on-line transmission of information regarding applicable taxes, tax collection, and income tax returns.
To ensure that the successful process is carried out, the following bodies were networked together to take the idea to its logical conclusion:
· The Central Board of Direct Taxes
· The Indian Banks Association
· The Controller of Accounts
· The Reserve Bank of India
How does online tax accounting system works?
The Income Tax Department comes up with a definite format with regards to updating the data of all tax payments. The guidelines were passed to every participating bank where it is mandatory to use the specific income tax format which makes it easy to generate and transfer the information relating to tax payments or collections. Following the outlined file format, NSDL provided File Validation Utility (FVU) format, which ensures the structured maintenance of all tax records.
According to the guidelines of OLTAS, the taxpayer can only use a single copy of 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 283, which is required for any taxes related to edge benefits or banking cash transactions
· Challan Number ITNS 282 required for paying the following taxes:
à Gift Tax
à Wealth Tax
à Hotel Receipts Tax
à Estate Duty
à Securities Transaction Tax
à Expenditure Tax
à Any other direct tax
For more information about OLTAS, challan status, working mechanism, tax benefits, and so on, you can visit https://www.applykaroo.com/online-tax-accounting-system.
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