How to Fill a DD Challan Without Mistakes (DD Challan Details, FAQs)

A Demand Draft (DD) is a secure payment instrument provided by banks to transfer money from one bank to another. This payment method is widely preferred, especially when the payee is not familiar with the payer, as it ensures the amount will be honored by the bank. Let’s dive into the details of filling out a DD challan accurately, common challenges, FAQs, and tips to make the process smoother.

What is a Demand Draft (DD)?

A Demand Draft, also called a DD, is a negotiable instrument that a bank issues on behalf of a client. When the bank (drawee) issues a DD to a client (drawer), the DD guarantees payment of a specific sum to the intended recipient (payee). It’s a safer alternative to checks, particularly for larger transactions or unknown parties, as the bank secures the payment.

Key Fields in a Demand Draft (DD)

The DD contains several essential fields that need to be filled out correctly to avoid issues. Here are the main details you’ll see on a DD:

• Bank Branch: The branch where the DD is issued.
• To Pay: The payee’s details (name and address).
• Date/Validity: The issue date of the DD, with a validity period of three months from this date.
• Amount (in words and figures): The amount payable to the payee in both figures and words.
• DD Number: A unique number assigned by the bank to the DD.
• Signature: The signature and stamp of an authorized bank official.

Filling Out a DD Form (Challan) Correctly

It’s important to be thorough when filling out the DD form to avoid delays or the risk of the bank refusing to process it. Here’s how to fill in the DD form accurately:

1. Name and Address of Drawer: Write your full name and address.

2. Name of Drawee: Provide the name of the bank issuing the DD.

3. Name and Address of Payee: Enter the payee’s details clearly.

4. City of Payment: Indicate the city where the DD is payable.

5. Amount (in words and figures): Ensure the amount is correct and consistent in both fields.

6. Exchange Fee: Enter the bank’s service charge.

7. Total Payable Amount: Sum the DD amount and exchange fee, and fill it in this field.

8. Signature: Sign the form to complete the process.

In some forms, the drawer (you) may be referred to as the “applicant.”

Steps to Issue a Demand Draft

Demand drafts can be issued both offline and online. Here are the steps for each method:

Offline Method

1. Complete the DD Form: Fill in all required fields on the form.
2. Payment: Submit cash or authorize payment from your account.
3. Bank Verification: The bank will verify all details on the form.
4. Receive the DD: After verification and payment, the bank issues the DD.
5. Submit to Payee: Hand over the DD to the payee to complete the transaction.

Online Method

1. Login to Net Banking: Access your bank’s net banking portal.
2. Find ‘Request and Enquiries’: Navigate to this section and select ‘Issue Demand Draft’.
3. Enter Details: Choose the account, enter DD amount, payee’s details, purpose, and branch code.
4. Select Delivery Method: Choose between courier delivery or in-person pickup.
5. Submit: Complete the process by clicking ‘Submit.’

Key Tips to Remember When Filling Out a DD

• Cash Payment: When paying in cash, submit the DD form with the cash amount.
• Bank Account Payment: If paying through your bank account, include those details, as funds will be deducted directly.
• PAN Requirement: PAN details are required if the amount exceeds ₹50,000.
• Double-Check Details: Verify all information before leaving the bank.
• Photocopy: Take a photo or make a copy of the DD for your records.

Features of a Demand Draft

• Payable on Demand: Can be encashed immediately upon deposit by the payee.
• No Stamp: DDs do not bear any physical stamps.
• Not Transferable: DDs are only payable to the named payee and cannot be transferred.
• Validity: Valid for 3 months; if not deposited within this timeframe, it must be revalidated.
• Refund: The issuing bank refunds the amount if the DD is not delivered.

Advantages of Using a Demand Draft

• Guaranteed Payment: Unlike a personal check, DDs are guaranteed by the issuing bank.
• High-Value Transactions: DDs are reliable for large payments, such as fees, car purchases, and real estate transactions.
• Cross-Border Payments: DDs can be used for international purchases.

Types of Demand Drafts

• Sight Demand Draft: Paid immediately upon presentation after document verification.
• Time Demand Draft: Payment is made only after a specified period, often with an expiration date.

Demand Draft Cancellation Process

If you need to cancel a DD, here’s how to do it:

• Write a formal cancellation letter to the bank manager.
• Provide the DD number, your account details, and the amount.
• Explain the reason for cancellation.
• Attach a copy of the DD if possible.
• Submit the original DD and receipt if the payment was made in cash.

Note: For cash payments, refunds will be in cash. If payment was made through your account, the amount is refunded to your account after deducting a cancellation fee.

FAQs

Q: How long does it take for a DD to clear?

A: Clearing time is typically within hours or one business day if within the same bank. For different banks, it may take up to three days.

Q: Is there a charge for DDs over ₹1 lakh?

A: Charges vary by bank; some banks may offer a reduced fee for high-value DDs.

Q: What should I do if I lose my DD?

A: Sign an indemnity bond on stamp paper and submit it to the bank. Banks usually process lost DD refunds within a week.

Q: What happens if my DD expires?

A: Submit an application for revalidation. Revalidation is allowed once, extending the DD’s validity by three months.

Demand drafts remain a valuable financial instrument for secure transactions, especially when dealing with significant sums or unknown parties. By following the instructions and guidelines above, you can ensure the DD process is smooth and error-free.