Online Tax Accounting System (OTAP)

Online tax accounting system is an approach that will be applicable or used while collecting direct tax from companies, organization or any liable individual. To collect the information about all the tax paid by the recently described entities and especially who choose to pay their taxes via online mode, so simplify these transaction and processing income tax department of India announces this approach and making all the processing transparent.

Online Tax Accounting System was introduced by the income tax department in 2004 to handle the following important points:
1. Auditing and Accounting in Online Direct Tax Payment.
2. Collection of Direct Tax Online.
3. Other respective information and receipt collection of online direct tax payment.


Initially collection of tax executed by the government traditional collection system of amount collection. As we know that previous process was quite tedious and time consuming. Apart from this issue there were several issues that occur while auditing the account and transaction performed by the respective person or agency. Chairman of the Advisory Group on Tax Reforms give the idea of this magical reform in tax collection system that will help reserve bank of India and respective bank much robust and integrated. Online tax collection makes things much easier to handle and calculate the applicable tax.

In this proposal several government bodies and committees were involved. List of all responsible agency were involved in outlined below:
a. Reserve Bank of India (RBI)
b. Central Board of Direct Tax (CBDT)
c. The Indian Bank Association (IBA)
d. The Controller of Account (CA)

Online tax accounting system final execution came into existence after its integrated testing in three different phases. Initial motive of this process was to collect tax form corporate through corporate houses but after its initial success it spread its area and collection not only from corporate but form individual tax payer too and as of now it cover more than 32 banks tax system and collection of their taxes.

In primary stage of this scheme it was just information center for all tax payers but from 2005 April, it was shifted into its online format and in latest mode it is quite integral part of tax collection system. Whenever someone pay their tax then their amount via TIN number transfer into bank account of respective bank to confirm the latest report of tax payer.

Online Tax Accounting System (OTAS) Working Mechanism

As far as tax related record or information is concern income tax department of India use authentic format that makes things much easier for tax payers. The entire associated bank follows the same process to collect their customers tax amount without any complication. It is quite vital to make process much easier and smooth. NSDL provides the file validation utility to keep process in structured format.

As per the policy single copy of challan is used by the taxpayers, specified below according to tax type
a. In case of individual tax payment or corporate tax payment ITNS 280 challan is used.
b. For depositing all TCS and TDS, ITNS 281 challan is used.
c. To pay any other direct tax, wealth tax, Estate duty, gift tax, expenditure tax, hotel receipt tax, securities transaction tax and other respective tax ITNS 282 challan number is used.
d. To perform any other banking transaction or regarding any fringe gains ITNS 283 challan number is used.

After filing the challan form bank collect document form customer and allot a CIN or challan identification number that is combination of information specified below
1. Release Date of Challan.
2. Severn digit number that that represent to bank bar code. This is important to collection information about the tax payer in respective bank.
3. Unique five digit challan number use to pay tax on that particular day.

Challan Status Enquiry of Online Tax Accounting System (OTAS)

Tax information network or sometimes known as TIN avails the facility for all tax payer to place their queries online and here they will get most authentic solution of their issues. With the help of this facility user can easily upload their details along with valid documents. Some Specific Tools are specified below

1. View Based on Challan Identification Number: Once tax payers will enter the details about their tax amount then following details will appear
a. Date of amount deposit
b. BSR code of Bank
c. Date when TIN receive the challan
d. Serial number of challan
e. Name of Tax Payer.
f. PAN and TAN number of tax payers
g. Major Head code along with description.
2. View Based on TAN: If taxpayer use TAN to pay their tax his or her tax then they have to access the following information
a. Minor head code
b. Details about the payments
c. Major Head code along with full description.
d. Availability of challan identification number.

Online Tax Accounting System (OTAS) Benefits

1. It makes tax payment so flexible in comparison of traditional tax payment system.
2. As per latest tax payment process single challan is required as in previous system four challan were required.
3. In online system information collection becomes much easier.
4. Challan identification number helps in payment validation.
5. Managing all the necessary record and their accessing is just one click away.
6. CIN pay vital role in case of tax return.