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2. Learning Objective By the end of the session, Participants will be able to : Differentiate between two types of taxes Appreciate the process of direct tax collection Describe the bank’s role in tax collection State the benefit of providing this service by the bank IMA 206 2

3. Tax payment How do people remit taxes due to the Government? How does the money reach the Government? What are the types of taxes that people pay? What role do Banks play in tax collection? Has technology made a difference to this ancillary service? IMA 206 3

4. Types of taxes collected through banks IMA 206 4 Directly levied on the income of the customer Direct taxes Not levied on individuals, but on goods and services. Indirect Taxes

5. Activity Categorise the following into Direct and Indirect taxes IMA 206 5 Corporate Tax Excise duty Interest Tax Gift Tax Stamp duty Securities Transaction Tax Income Tax Sales tax Fringe Benefits Tax Estate Duty Wealth Tax Custom duty

6. Types of taxes collected through banks IMA 206 6 Income tax Gift tax Corporate tax Interest tax Securities transaction tax Wealth tax Estate duty Fringe benefit tax Direct taxes Custom duty Excise duty Sales tax VAT Stamp duty Indirect Taxes

7. Problems faced in tax collection Unable to handle work load owing to exponential rise in taxpayer numbers and collections Too much time lag between tax challans presentation at banks and their manual transfer to Department Problem in manual tracking of paper tax challans So there was a need for rapid transfer of tax collection data between bank and tax department Hence OLTAS (Online tax accounting system) was introduced in June, 2004 in banks for direct tax accounting. IMA 206 7

8. OLTAS work flow IMA 206 8 Tax payer Collecting branches Nodal Branch ZAO RCC, ITD Bank’s Link at Nagpur NCC, ITD RBI, CAS, Nagpur TIN Pr.CCA, New Delhi Govt Account Single challan Payment Phys Movt Reports Online Online Reports Online Recon Reports Online

9. Challan for remitting direct tax IMA 206 9 How does the new system of OLTAS benefit the common tax payer? What is the new procedure for payment of direct taxes at bank? What is CIN (Challan identification number) and what is its relevance?

10. Challan status inquiry for tax payer Payers have to log on through https://tin.tin.nsdl.com/oltas/index.html to view whether the challan for the tax payments is received by TIN. https://tin.tin.nsdl.com/oltas/index.html IMA 206 10

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13. Activity Refer the exercise-1 of tax collection from work book-session 11 for class room activity Case study Non-class room activity: Class to be divided into 10 groups and ask them to collect information on six types of tax challans from different banks and make presentation on procedure of tax payment procedure in session-14 Refer work book session-14 for understanding the activity IMA 206 13

14. There are two types of taxes collected by banks namely, direct taxes and indirect taxes Direct taxes are directly collected on the income of individual OLTAS (Online tax accounting system) was introduced in June, 2004 in banks for direct tax accounting Through OLTAS the customer has to fill only one challan compared to earlier 4 challans For different taxes different challans need to be filled IMA 206 14

15. In the next session, you will learn Indirect tax collection e-payment of taxes IMA 206 15