Income Tax E-Payment: Steps to Follow While Paying Income Tax in India

Income Tax E-Payment: Steps to Follow While Paying Income Tax in India

If you are a salaried individual or a businessman living in India, then income tax payment and subsequent filing of tax returns are the two most important activities that you must accomplish during each financial year. In doing so you remain out of the scrutiny of the Income Tax Department. If you fail to file your income tax returns on time click here to know the process.

With the digital wave effectively eliminating almost all manual methods of making payments, the Government portals are the ones that have been the most efficient in adopting the hassle-free and instant online payment methods of tax collection. The form that people make use of to pay advance tax, self-assessment tax, etc. is known as Challan 280. Salaried individuals typically do not have to worry about paying their Advance Income Tax on time because the Tax Deducted as Source (TDS) is deducted by their respective employers and submitted to the Indian Government. Entrepreneurs or businessmen, on the other hand, are required to assess their total income tax liability and pay their due taxes online in a timely manner. In case salaried individuals have other (additional) sources of income, they will be required to pay the Advance Tax on time, in order to avoid penalties.

The below-mentioned steps can be followed to pay income tax dues online:

  1. On the portal of the Income Tax Department, visit the tax information network and choose the option ‘Challan 280’.

  2. After selecting ‘Challan 280’, you will then be required enter your personal details, such as your PAN, complete address, assessment year, payment type, the bank name through which you are paying, and so on.

  3. Choose the payment mode that you wish to use to make the due payment. There are typically two payment modes available – Debit Card and Net banking.

  4. You will then be required to enter the Captcha code in the required space.

  5. Select the option ‘Proceed’.

  6. Once you have chosen the payment mode, you will then be redirected to the payment page of your bank. Once you have reached this stage, it is crucial to double check the information that you have entered so far. Once you are done checking the entered information, put in the total income tax paid that is due. After having entered the total due amount, choose the option ‘Confirm’.

  7. After the payment of income tax is done, you will receive a tax receipt on the screen. On this screen you can view the information about your payment. The challan serial number along with the BSR code can be spotted on the top right corner of the challan.

  8. It is important that you either take a screenshot of this receipt or save a soft copy on your computer. This is because at the time of filing the income tax return, you will need both the BSR code as well as the challan number.

  9. In case you have not downloaded the tax receipt, you can do so by logging in your net banking account.

Declaration of the Paid Income Taxes: After the payment of your income taxes is done, you will then be required to furnish the details in your IT return (income tax return). This can be accomplished by means of various portals available online.

Advance Tax – When Do you Have to Pay Advance Tax: If your total annual taxes are due up to an amount of Rs.10,000 or more, you will be required to pay the income tax well in advance. This is pertaining to self-employed individuals or businessmen only. If you are a salaried individual, your advance taxes will be paid by your employer in the form of TDS. Some of the situations wherein an individual has to pay advance tax are:

  1. If the individual has a salaried income but they also have a considerably higher income capital gains, interests, or rental incomes.

  2. If the individual is a freelancer.

  3. If the individual has a business.

Calculation and Payment of Advance Tax: The steps mentioned below can be followed to calculate and pay advance tax:

  1. An estimation of the total income must be taken – This can be done by adding all incomes coming in from all sources. The elements that must be included in this are salary income, capital gains, interest income, rental income, and so on. In case you are a freelancer, you will have to estimate your yearly income coming in from all the clients.

  2. Freelancers will have to minus the expenses – If you are a freelancer, you will have the liberty to deduct expenses from all your freelancing receipts which include your workplace rent, internet bill, mobile bill, travel expenditure, and so on.

  3. Deductions must be included – Reduce the deductions for which you want to claim your income tax return. This will include the deductions that are allowed under Sections 80C, 80D, 80E, or any other.

  4. Computation of the total due tax must be done – In the final step, you will be required to apply the most recent income tax slab rates on your total taxable income in order to compute the total tax that is due.

Self-Assessment Tax: You will not be able to submit your income tax return to the Income Tax Department if all due taxes have not been paid. The taxes that remain to be paid will be displayed during the time of your return filing. Such taxes are known as self-assessment taxes. If you want your e-filing procedure to be a successful one, you will have to pay all the due taxes.

Outstanding Demand Payment: In order to comply with a tax demand notice, an individual is required to make a tax payment. Such a tax can also be paid online.

In case of misplacement of the challan receipt, one can always redownload the same by logging into the respective net banking account. In case the individual has made the payment via cash or has deposited a cheque, they will have to contact the bank to obtain the challan receipt.

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