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Income Tax Challan - How to Pay Your Income Tax Online?

Paying income tax is an essential responsibility for every taxpayer. Fortunately, the process has become much more convenient with the introduction of online tax payment options. In this comprehensive guide, we will walk you through the step-by-step process of paying your income tax online via the Income Tax Portal. By following these instructions, you can avoid the hassle of long queues and save time by making your tax payment at your convenience.

Step 1: Navigating to the 'e-Pay Tax' Section

To begin the process, visit the Income Tax Portal and locate the 'Quick Links' section on the left side of the homepage. Within this section, click on the 'e-Pay Tax' option. If you cannot find it, you can also use the search bar to locate the 'e-Pay Tax' section.

Step 2: Enter PAN/TAN and Mobile Number

Once you have accessed the 'e-Pay Tax' section, enter your PAN (Permanent Account Number) and re-enter it to confirm. Provide your mobile number and click 'Continue'. You will receive a 6-digit OTP (One-Time Password) on your mobile number. Enter this OTP and click 'Continue' to proceed to the next step.

 

You will receive a 6-digit OTP (One-Time Password) on your mobile number. Enter this OTP and click 'Continue' to proceed to the next step.


Step 3: Select the Correct Assessment Year and Payment Type

  • Select the first box labelled as ‘Income Tax’ and click ‘Proceed’


 

  • From the ‘Assessment Year’ dropdown, select ‘2023-24’
  • Under the ‘Type of Payment’, select ‘Self-Assessment Tax (300)’ and click on 'Continue'.

Step 4: Enter Tax Payment Details

In this section, you will need to enter the accurate payment amounts under the relevant categories. To ensure the correct figures, you can refer to the pre-filled challan on The Tax Heaven or consult your financial records. Take your time to carefully input the payment amounts to avoid any errors.

Step 5: Select the Payment Method

Once you have entered the tax payment details, it's time to select the payment method. You can choose from various options such as internet banking, debit card, credit card, RTGS/NEFT, UPI, or paying at the bank counter. Select the payment method that is most convenient for you, and choose the bank through which you want to make the payment. Then, click 'Continue' to proceed.

Step 6: Verify Payment Information

After selecting the payment method and bank, you will have the opportunity to review the payment information before finalizing the transaction. Take a moment to verify that all the details are accurate and correctly entered. If everything looks good, click 'Pay Now' to initiate the payment. If you need to make any changes or corrections, click 'Edit' to modify the details accordingly.

Step 7: Submit the Payment

Once you have reviewed and confirmed the payment information, you will need to agree to the Terms and Conditions by ticking the checkbox. After that, click 'Submit To Bank' to proceed with the payment. This will redirect you to the selected bank's payment gateway, where you will need to follow the instructions provided to complete the transaction securely.

Step 8: Receive Payment Confirmation

Upon successful submission of your tax payment, you will receive a confirmation message indicating that the payment has been processed. It is essential to keep a record of this confirmation for future reference. Remember to download the challan, as you will need the BSR code and Challan number for completing the return filing process.

After making the tax payment, update the payment information on
 

Banks Authorised for e-Tax Payment

  • Axis Bank
  • Bank of Baroda
  • Bank of India
  • Bank of Maharashtra
  • Canara Bank
  • Central Bank of India
  • City Union Bank
  • Federal Bank
  • HDFC Bank
  • ICICI Bank
  • IDBI Bank
  • Indian Bank
  • Indian Overseas Bank
  • IndusInd Bank
  • Jammu and Kashmir Bank
  • Karur Vysya Bank
  • Kotak Mahindra Bank
  • Punjab National Bank
  • Punjab & Sind Bank
  • RBL Bank
  • State Bank of India
  • UCO BANK
  • Union Bank of India

Benefits of e-Tax Payment

The introduction of electronic tax payment options has made the process more convenient and user-friendly. Here are some of the benefits of e-Payments:

  1. Time-saving: Paying taxes online saves time and allows you to complete the process at your convenience, without having to wait in long queues.
  2. Automatic record updates: When you make an online tax payment, the tax department's records are automatically updated, eliminating the need for additional steps to ensure accurate record-keeping.
  3. Instant receipt generation: With online payments, you can instantly generate a receipt for your tax payment, providing you with immediate proof of payment.
  4. Online verification: You can easily verify the status of your tax payment online, allowing you to stay updated and informed about the progress of your tax-related transactions.

Eligibility for e-Tax Payment

As of 1st April 2008, the following taxpayers are required to pay taxes online:

  1. Corporate assesses: All corporate assesses are mandated to pay taxes online.
  2. Assesses subject to section 44AB: Taxpayers other than companies who are subject to audit under Section 44AB of the Income Tax Act, 1961, are also required to pay taxes online.

Self-Assessment Tax

Before submitting your income tax return, it is essential to ensure that you have paid your tax dues in full. In some cases, you may see a tax payable amount at the time of filing your return. This is known as Self-Assessment Tax, which can be paid online to facilitate successful e-filing. If you are paying tax after 31st March, it is also necessary to pay the interest under sections 234B and 234C along with your tax dues. When using The Tax Heaven for e-filing, the system will automatically calculate the amount of tax you need to pay for filing your return accurately. You can also seek assistance from a Chartered Accountant (CA) to ensure the correct amount is paid.

Advance Tax

If your annual tax dues exceed Rs. 10,000, you are required to pay income tax in advance. This is particularly applicable in the following situations:

  1. Salaried individuals with additional income: If you are salaried but have significant income from sources such as interest, capital gains, or rental income, you are required to pay advance tax.
  2. Freelancers: Freelancers are also required to pay advance tax, as their income is not subject to TDS deductions made by employers.
  3. Business owners: If you are running a business, you must pay advance tax based on your estimated annual income.

Calculating and Paying Advance Tax

To calculate your advance tax liability, add up your income from various sources, including salary, interest, capital gains, and other earnings. If you are a freelancer, estimate your annual income from all clients and deduct any relevant expenses. Once you have determined your taxable income, apply the latest income tax slab rates to calculate your income tax due. Deduct any TDS amounts that may have been deducted from your total tax due. To facilitate online payment, you can use the Income Tax Portal's online payment facility or consult a CA for assistance in calculating and paying your advance tax liability.

Due Dates for Payment of Advance Tax for FY 2022-23

To ensure timely payment of advance tax, the following due dates must be adhered to:

  • On or before 15th June: Pay up to 15% of advance tax
  • On or before 15th September: Pay up to 45% of advance tax, less any advance tax already paid
  • On or before 15th December: Pay up to 75% of advance tax, less any advance tax already paid
  • On or before 15th March: Pay up to 100% of advance tax, less any advance tax already paid

Non-payment of advance tax within the specified due dates can result in the levy of penal interest under sections 234B and 234C of the Income Tax Act.

Outstanding Demand Payment

In certain cases, you may receive an income tax demand notice from the assessing officer. If you agree with the assessment and are ready to pay the outstanding tax amount, you can make the payment online. This is known as the tax on regular assessment. It is important to comply with the demand notice and make the necessary payment to avoid any penalties or legal consequences.

Frequently Asked Questions

  1. What is included in my total tax payable during a year?
  • Your total tax payable is calculated by summing up all your income, availing applicable deductions, determining your taxable income, and applying the income tax rates based on your income slab. Additional surcharges and cess may also apply based on your income level.
  1. Is it necessary to pay taxes online? Can I pay taxes through other means?
  • Online tax payment is mandatory for companies and taxpayers subject to audit under Section 44AB of the Income Tax Act. However, other taxpayers can also choose to pay taxes physically by submitting the challan at designated banks. Online payment is highly recommended as it is convenient and saves time.
  1. What are the benefits of paying taxes online?
  • Paying taxes online offers several advantages, including time-saving, convenience, and immediate credit to the government. Online payments also provide the facility to verify the status of tax payments and generate receipts instantly.
  1. What are the prerequisites for paying taxes online?
  • To make e-payments, you need an internet connection and internet banking enabled for your bank account. If you don't have internet banking, you can use someone else's net banking account, but ensure that the taxes are discharged in your name and against your PAN.
  1. Which taxes can be paid electronically?
  • Online payment facilities are available for various taxes, including income tax, corporate tax, TDS (Tax Deducted at Source), TCS (Tax Collected at Source), Securities Transaction Tax (STT), and Equalisation levy.
  1. What should I do if I have selected the wrong assessment year while paying tax?
  • If you have made a mistake while selecting the assessment year, you should include the payment details when filing your income tax returns. Additionally, you can request your jurisdictional assessing officer or the bank to rectify the challan within a specified time period. Respond to any notices or communications from the assessing officer and submit a rectification request if necessary.

Conclusion

Paying income tax online has become a convenient and time-saving option for taxpayers. By following the step-by-step guide provided in this article, you can easily navigate the Income Tax Portal and make your tax payment without any hassle. Remember to keep a record of your payment confirmation and update the payment information on The Tax Heaven for smooth filing and verification of your return. Whether you are paying self-assessment tax, advance tax, or clearing an outstanding demand, online tax payment provides a secure and efficient solution for fulfilling your tax obligations.

author

The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

Frequently Asked Questions

An Income Tax Challan is a form used for making payments towards income tax liabilities to the government. It contains details such as the taxpayer's name, PAN (Permanent Account Number), assessment year, type of payment, and the amount to be paid.

You can pay your income tax online through various methods such as internet banking, debit card, credit card, or through the government's online tax payment portals.

To pay income tax online using internet banking, you need to log in to your bank's internet banking portal, navigate to the tax payment section, select the relevant tax type (e.g., income tax), fill in the required details, and authorize the payment.

Yes, you can use your debit card or credit card to pay income tax online through the government's online tax payment portals or authorized bank portals.

To pay income tax using a debit card or credit card, visit the government's online tax payment portal, select the relevant tax type, fill in the required details, choose the payment option as debit card or credit card, and complete the transaction by providing card details and OTP (One-Time Password).

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