Paying taxes online is quick, easy and can be done sitting at home.
In this article, you can find a detailed step by step procedure to pay income tax online. Taxes which can be paid online by individuals are advance tax and self-assessment tax.
Even tax on regular assessment, surtax and tax on distributed profits of domestic companies and tax on distributed income can be paid online.
But before paying taxes online you should learn important tax-related information.
Select Your Favorite Section
- Documents and Information Required for Paying Income Tax Online
- Advance Income Tax
- Steps to Pay Income Tax Online
- Advantages of Paying Income Tax Online
- Self Assessment Tax
Let us understand a bit about advance tax and self-assessment taxes.
If you are a salaried person, then you need not to worry about advance tax. Both deduction and payment of taxes to the government is taken care of by your employer.
However, the advance tax should be paid by self-employed, businessmen and professionals.
They are required to assess income, expenses and tax liabilities well in advance and keep on paying taxes at regular intervals.
Law mandates, advance tax for all persons whose estimated tax liabilities (after TDS deduction) exceeds Rs. 10,000.
So even if you are a salaried person and have annual tax dues of over Rs. 10,000 then you need to pay advance tax. Your employer regularly deducts TDS and deposits it to the government.
In order to calculate the advance tax, you need to list down all the possible income sources.
The best way is to check all your financial assets for dividends and interests. Check bank account statements for all the credits details.
The salaried persons need to inform about additional income and income sources to their employer so that the tax calculations can be done properly.
Persons other than salaried individuals, i.e. freelancers, self-employed and professionals need to subtract expenses like office rent, electricity, internet, mobile and other bills, depreciation and travel expenses etc.
In order to subtract expenses, you need to maintain books and accounts for expenses or you have the option to file tax returns under presumptive income.
Deductions & Taxes
Later you can list down various deductions and exemptions which you want to claim. Then arrive at the taxable income and the taxes to be paid.
Remember to subtract any amount of TDS paid and then arrive at the advance tax payable.
The government requires you to pay advance taxes as follows
|Before 15th June||Up to 15% of advance tax|
|Before 15th Sept||Up to 45% of advance tax less advance tax already paid|
|Before 15th Dec||Up to 75% of advance tax less advance tax already paid|
|Before 15th March||Up to 100% of advance tax less advance tax already paid|
Any non-payment of advance tax can result in penal interest levy under section 234B and 234C.
After assessment of the tax, the next step will be to go to the Income-tax Web Portal for paying tax.
The web portal looks like as shown below
For payment of advance tax, self-assessment tax or tax on regular assessment select Challan No./ITNS 280 as shown below.
After clicking proceed the next page will require you to fill in certain personal information.
- Select (0021) Income Tax (Other than Companies) under the heading “Tax Applicable”.
- Check type of payment
- Select mode of payment. Presently, online tax payment accepts payments made through net banking and through debit card only.
- Fill in the PAN number, assessment year to which the tax pertains and the contact details correctly.
- Enter captcha code as shown and the click proceed.
A confirmation page will pop up asking you to double check information. Once again please check information related to PAN and assessment year as indicated by the red arrows.
Next, you can consent by checking the box “I Agree” and click “submit to the bank”.
After which you will be redirected to your bank website for filling in the amount and paying of the taxes.
I have used Canara Bank for illustration. Do fill in the correct tax payment details and check the total before confirming.
Post which you will be prompted for online payment. Fill in the debit card or net banking details and make payment.
On successful payment, you will get a receipt or taxpayer counterfoil. The counterfoil will contain details of the tax payment done.
Please note down the date of payment and the BSR code which will be required while filing tax returns online.
Also, keep tax receipts safely as they will be required at the time of final tax computation and filing of returns.
If you have accidentally missed downloading the tax counterfoil then you can login into the banks portal/ net banking and can regenerate or retrieve the receipt.
Self-assessment tax arises when you missed informing any income to your employer or missed while making the final payment of advance tax.
There might be chances that TDS was not deducted or mistakenly deducted at a lower rate or not deposited in the government account.
There are possibilities that you may not have added interest on the savings account or fixed deposit to your total income which you remember later. All of which requires you to pay self-assessment tax.
Online filing of tax returns is not possible unless you have paid tax dues in full. The form does not let you submit the tax return form.
You will see the tax payable amount while filing returns, which is nothing but self-assessment tax.
Note: In case you came to know later than March 31st, then make sure you pay interest along with self-assessment taxes.