New Delhi: As part of making tax payment simpler and faster, an Online Tax Accounting system will come into effect from tomorrow (Jun 1, 2004).

The new online system would simplify the procedure of tax payment and ensure that taxpayers get accurate credit for their payments, an official statement said.

It would also enable Income Tax department to monitor tax collections on a day-to-day basis, it said.

The tax payments from banks will reach the Tax Information Network (TIN) of the Government in two days instead of the present over 15 days.

The IT department will introduce the system of online tax payment throughout the country from June one.

The new system will simplify procedures by reducing the number of challans to three from the present seven required for paying tax through banks.

Taxpayers will have to fill a single copy tax challan instead of four as at present and it would be identifiable by a unique Challan Identification Number as also the Permanent Account Number (PAN) or Tax Deduction Account Number (TAN).

Banks would enter the data from the main copy of the challan and transmit it online to I-T department's TIN.

Taxpayers need not have to enclose copy of the challan with their returns, as the challans would be dematerialised. Instead, they will just have to mention the Challan Identification Number. Tax authorities will verify claims for credit with the information available from TIN.