How to Pay Income Tax Online in India 2023

Taxes are significant tools for nation building. Income tax is the major revenue stream for any government, which is used for the development of vital sectors of the country like education, health, infrastructure, defense, etc.

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So, for the cumulative growth of our country, it is a duty of all salaried individual to pay income tax. Although, the number of people finds paying taxes burdensome in either way financially or on time.  To help out people with this problem, the department has exercised sufficient provisions to ensure the payment of taxes.

Income Tax Online Payment

To justify income every Indian citizen must pay income tax. In other words, this is the way the income tax department keeps a watchful eye on the tax evaders. Tax, being a necessary burden, IT department has made sufficient provisions so that income tax payment is no longer an avoidable thing.

Income Tax Payment Process

The income of someone can be taxed in three ways-

  • Tax deducted at source (TDS)

  • Advance tax payments

  • Self- assessment taxes paid before filing ITR

An individual is eligible to pay advance tax if he/she fulfils the criteria of existing income tax laws. Usually, someone with the annual income above INR 10,000 is eligible to pay income tax as an advance tax. However, it is not mandatory for the salaried person (whose salary is subject to TDS) to pay income tax as an advance tax. Still, if someone has income from other sources like capital gain or income from interest, which is not intimated by the employer, he/she should pay advance tax on such income tax sources.

Most importantly, one needs to calculate his/her tax liability on the income earned before filing ITR. He/she can deposit the balance tax payable as self-assessment tax.

Self-Assessment Tax

Keeping in mind the convenience of the citizens the whole tax liability is divided up into portions so that people pay advance taxes on the income reducing the burden to pay a lump-sum at one go. Generally, one can know about the deducted tax amount through the salary slip. However, the actual tax liability can be different from the deducted amount, in order to ensure this tax computation is being done at an approximate level. In some cases, the advance tax paid can be lesser than actual tax calculated, in such cases the individual need to pay the additional amount in order to clear all dues.

The taxpayers can self-assess their taxes which is almost equal to actual tax liability. However, in some cases, self-assessment of taxes can go off track resultant of which the person will have to pay the due amount.

Income Tax Payment Method

An individual can pay the taxes in two ways- online and offline. However, in today’s fast-growing life, where we have less time even for ourselves, the internet has made everything possible in a few clicks. Same goes for income tax payment as well. Online payment of income tax is the easiest and time-saving option to pay income tax.

Online Tax Payment Method

Most of the people find tax payment complicated and time-consuming, and in case one has to pay the extra amount then it can be pretty worrisome. So, to avoid this problem, the Income Tax department of our country has put adequate procedures to ensure the payment of taxes on time and in hassle free manner. The salaried individuals can pay the taxes online by following some simple steps. However, one should keep in mind that online payment can only be done through net banking.

1. In order to pay tax online first log into > Services > e-payment: click here on tax e-pay taxes and pay taxes online.    

2. First and foremost the person will have to go to tax information network of Income Tax Department and will have to select Challan 280. 

3. Once you have selected the challan choose the assessment year correctly. Choose section 100 “Advance Tax” if the person is paying tax during the financial years, section 400 “Tax on Regular Assessment” if the individual gets a demand notice  from the tax department and chooses section 300 “ Self-Assessment of Taxes” if the person is paying tax after the financial year has ended.

4. After choosing the assessment year correctly fill up the mandatory fields which includes:-

  •  PAN

  •  Assessment Year

  •  Address

  •  Phone number

  •  Email Address

  •  Bank Name

  •  Captcha Code

5.  On confirmation of the data entered by the individual, the taxpayer will be preceded to the net-banking site of the bank.

6. In order to further proceed with the payment of income tax online, the taxpayer will have to login to the net banking site with user id/password provided by the bank for net banking purpose and enter the payment details on the bank site.

7.  On successful payment of income tax challan counterfoil is displayed which includes information about the paid tax and the taxpayer should keep it with themselves in case of any future queries with the Income Tax department.

8. In your Challan 280, the individual will be able to see details about the payment on the receipt. 

With the enhancement of technology, in today’s time online payment of income tax has become extremely time-saving and hassle-free. However, according to the person’s own choice he/she can pay tax offline also by visiting the designated bank and pay the due amount either by cheque or by cash. If the person pays the tax offline then he/she will have to collect the challan from the IT office, after that they will have to fill it and submit with the required amount.

Important Aspects that should be Kept in Mind While Paying Due

There are certain things that should be kept in mind while paying dues

  • PAN- It is crucial to enter the correct Permanent Account Number.

  • Verification- To ensure that the form is filled correctly, one should dual check and verify the completed form.

  • Calculation- The payers should recheck the due amount and calculate for themselves in order to avoid any further mistakes.

  • Receipt- The challan counterfoil generated after the deduction of tax should be kept safe for any future agreement with the income tax department. 

Income Tax Payment Offline Method

In case the person is unable to pay income tax online, the other option is to pay tax offline. One can pay taxes offline by visiting the most easily approachable bank branch and following the below steps to make payment offline:

  • Visit the nearest bank branch and ask the executive for tax payment challan form. One will need to fill Challan 280.

  • Mention the relevant details in the form. However, there is no difference b/w the online and offline form, so the details to be filled are the same.

  • After filling the required details, the filled-in challan 280 needs to be submitted at the relevant bank counter along with the amount to be paid as tax. The income tax payment can be done either in cheque or in cash. However, the bank may not accept a huge amount as cash or may ask for a cheque. Hereby, income tax payment through cheque is recommended. This way it is easy to keep a track of the transaction. To pay income tax via cheque, the cheque should be made in favour of ‘Income Tax Department’ with the accurate taxable amount.

  • After collecting the cheque/money and challan, the bank official will handover a receipt against the payment of taxes.

Well whether one makes income tax payment online or offline, he/she should keep the receipts safely for future references. It may take up to 10 days to reflect on someone’s Form 26AS after paying the tax and will be appearing as 'Advance tax' or 'Self-assessment tax' according to the payment type.

What are the benefits of paying income tax online?

Paying income tax online has its own perks:

With an online facility, you can pay the taxes at any point of time from anywhere using the net banking facility.

  • There is no chance of penalty as funds are transferred immediately after the payment is initiated from your end.

  • All the information provided by you remain confidential and secured

  • Now keep your challan copy & receipt copy safe online

  • With online payment, checking your tax payment status is easy by visiting the Tax Information Network website

  • Upon your bank initiate the payment, a receipt of the payment will be forward to you

  • You will get the transaction id of the e-payment in your bank statement

  • You can even check the status of your money, whether it is reached to the IT department or not.

How to File Income Tax Return after Payment

Once the person is done with the tax payment, they need to report this information on your income tax return. Visit http://www.incometaxindia[dot] for e-filing or downloading the relevant forms for your income tax return. The taxpayer should have the BSR code and the challan number handy while filling the forms.”

You may like to Read: How to efile Income Tax

How to Calculate Self- Assessment Tax

The two major processes should be followed for interest calculation if the individual has made any tax payment prior the assessment date.

1. The interest is calculated in case of unpaid advance tax till the date it remains unpaid. The total time period for interest calculation starts from the taxation due date till the date the payment is actually made.

2. The total tax payable equals self-assessed tax liability less the total advance tax payment made till date.

The following procedure should be followed for the calculation of self-assessment tax

1. With the help of income tax slab, available online one can calculate the taxable amount payable on the individual’s total income.

2. Then include the interest payable under section 234A, 234B, and 234C.

3. After the addition of amount, deduct the relief amount under section 90, 90A.

4. At the end subtract the MAT credit amount under section 115JAA and advance tax amount

This will lead to the calculated self-assessment tax payable amount on the individual’s income tax. 

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