Many people feel squeamish about income tax season. Besides the looming deadline for filing your income tax return (ITR), you need to compute everything correctly and pay your tax due. Knowing how the process of tax payment works could ease your tax-related anxiety.
Types of income tax
The income you earn may attract three types of tax:
- Tax deducted at source (TDS): This tax is deducted by your employer over the financial year. Salaried individuals can view the deduction on their salary slips.
- Advance tax: Anybody who pays more than Rs 10,000 as income tax in a given year is liable to pay advance tax. Such tax applies to freelancers and business owners. Salaried individuals who have high rental income or capital gains may also need to pay advance tax. Rent receipts will help you compute your rental income, and you could download a capital gains report via your demat account.
- Self-assessment tax: At the time of ITR filing, some income tax dues may still be pending. This is the self-assessment tax. You must pay this to file your ITR successfully.
- Tax on regular assessment: Sometimes, taxpayers receive a notice from the Income Tax Department (ITD) with a demand for an outstanding income tax payment. If you agree with the assessing officer’s demand, you can pay the tax online.
Steps to pay income tax due online
- Visit the website of the Tax Information Network of the ITD.
- Select ‘Pay Taxes Online’.
- On the new page, select ‘Challan No. /ITNS 280’. This applies to individual taxpayers.
- When the new page opens, select ‘(0021) Income Tax (Other than companies)’. Fill in your other details—PAN, assessment year, address, etc.
- Select the type of tax you wish to pay, whether advance tax or self-assessment tax.
- Choose the mode of payment—net banking or debit card. As the debit card payment facility is available for only select banks, check the list before making your choice.
- Enter the captcha code and click on ‘Proceed’.
- Double-check the information on the new page and click on ‘Submit to the bank’. This will redirect you to the bank’s website.
- Now, log in to net banking or enter your debit card details and complete the payment.
- A receipt will be generated containing several important details—tax paid, BSR code, challan number, and date, among others. Hold on to the receipt. You will need it to file your ITR.
Steps to pay income tax due offline
- Collect Challan 280 from your bank branch.
- Submit the challan, duly filled in, along with the tax payment at the bank counter. You could pay via cash or cheque. For larger sums, cheque payments are advisable as these are easier to track. When paying by cheque, write it out in favour of ‘Income Tax Department’.
- The bank will give you a stamped receipt containing the payment details. As with the online challan receipt, store this safely for ITR filing.
Finally, follow up on your challan status. You can do so through the Tax Information Network website. Just keep in mind that it may take five to 10 days for the status to reflect that the ITD has received your payment. Need to reprint a misplaced challan? Download it via net banking if you paid the tax through this mode. Alternatively, contact the bank branch for a duplicate.