Equalization Levy
The equalization levy is considered as a direct tax. It is a tax that is kept on hold at the time of payment of service receipt. However, there are two essential conditions necessary to be met, namely:-
- First condition states that “the payment should be made to a non-resident service provider.
- Secondly, “the annual payment made to one service provider exceeds Rs. 1,00,000 in one financial year”.
With the aim to levy tax on every business-to-business transactions, equalization levy was initiated in 2016. In the current time, the applicable rate of tax (Equalization Levy) is 6% of the gross consideration to be paid. Let us proceed further to know “how to pay equalization levy” in details.
Allowed services under Equalization levy
One must note that the equalization levy is not applicable on all services. However, only to some specific services, namely:-
- Online advertisement
- Digital Advertising Space or facilities/ service for the purpose of online advertisement
How to pay Equalization Levy
Step 1: For making a payment of Equalization levy, click here(https://www.protean-tinpan.com/services/oltas/e-pay.html) to directly reach the portal of “Tax Information Network”
Step 2: You will see the homepage of NSDL where payment of Equalization levy shall be made. From the homepage, select the option “Services” and certain number of headings as options shall be displayed in front of you.
Step 3: From the various option given under the “Services” you have to choose “e-Payment: Pay Taxes Online”.
Step 4: In the red, it would be written: “Click to pay tax online”. Click on it and the final step will be in front of you.
Step 5: e-Payment of Taxes is the final stage, where Equalization levy payment will be made. Challan No./ITNS 285 is the specific challan for making equalization levy payments. Click on the yellow box and proceed.
Challan No. /ITNS 285 will be displayed which you are required to fill. Firstly, you need to select the category from the two options given. Tax Applicable and Types of Payment is already selected. Then, select the nature of payment. For making equalization levy payment, filling the Permanent Account Number and Financial Year is a necessary compliance. After that, address is asked as well the amount of payment. Fill all the essential information as asked and enter the captcha. After, completing the equalization levy challan, click on proceed. A confirmation message is displayed along with the preview of the challan filled by you.
So, this was how simple was the process of paying the Equalization Levy by filling the Challan No./ITNS 285.
Non-Compliance of Equalization Levy Payment
If any kind of delay is formed in making payment of equalization levy then, interest is charged at 1% of the outstanding levy for every month or part thereof.
Where a false statement is filed then, the person may be subjected to imprisonment of a term of up to 3 years and a fine.
*****NOTE:- e-Payment of Taxes option is given to taxpayers to pay tax online with ease. However, for availing this facility, it is necessary that the taxpayer must have a net-banking account with any of the authorized banks.*****
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