Income Tax is a form of direct tax imposed by the Government of India on any income (excluding agriculture and related activities) according to the Income Tax Act of 1961.
It applies to the taxable income of individuals, Hindu Undivided Families, partnerships, companies, Limited Liability Partnerships, local authorities, and any artificial juridical entity. Generally, individuals earning over Rs. 2.5 Lakh per annum are required to pay income tax under the ITA by 31st August of the preceding year.
Taxes are essential for the development of any nation, and income tax serves as the primary source of revenue for the government, which is utilized for the progress of key sectors of the country.
Failure to pay the required taxes may lead to penalties and legal actions against the aforementioned entities. Therefore, it is important for individuals to ensure timely tax payment and filing of their income tax returns to avoid any legal disputes.
Who Is Eligible to File Income Tax Returns Online?
India follows a progressive income tax system where higher-income earners fall under higher tax slabs. Anyone liable to pay income tax is eligible to file income tax returns. Even if your income is below the taxable limit, you may file a nil return to benefit from advantages such as easier loan processing.
According to the Income Tax Act, you are required to file an ITR if you fall under the following categories.
- Indian citizens with an annual income of Rs. 2.5 Lakhs or more
- Indian citizens above 60 years of age with an annual income greater than Rs. 3 Lakhs
- Citizens over 80 years old with an income over Rs. 5 Lakhs
- Firms (as per section 44AB), Cooperative Societies, BOI, AOP, Artificial Juridical Persons, and Local Authorities (ITR 5)
- Residents of India with property or financial interests in foreign entities
- Assessees who must file returns under Section 139 (4B) (ITR 7)
- Resident Indians who are signatories to accounts held outside India
- If you claim tax relief under sections 90, 90A, or deductions as per section 91
- All companies are required to file
Steps to Pay Income Tax Online
Many people find tax payment burdensome, and sometimes the extra charges add to the stress. To simplify this process, the Income Tax department has made use of technology to ensure smooth and timely tax payments.
Salaried individuals can make online tax payments by following a few simple steps. It is important to note that online payments are only possible through net banking.
Step 1:
Visit the Tax Information Network
To pay income tax online, go to the tax information network of the income tax department and click on the proceed option under “CHALLAN NO./ITNS 280” as the preferred income tax challan for online payment.
Step 2:
Fill in Personal Information
For individuals:
1st Step: Choose (0021) Income Tax (Other than Companies) under the ‘Tax applicable option’
2nd Step: Select the correct payment type from the following options:
- (100) Advance Tax
- (102) Surtax
- (106) Tax on Distributed Profit
- (107) Tax on Distributed Income
- (300) Self Assessment Tax
- (400) Tax on Regular Assessment
Choose ‘Self-assessment tax’ if you have taxes to pay.
3rd Step: Pick your preferred payment method. Two options are available – Net banking or Debit Card.
4th Step: Enter your PAN (Permanent Account Number) and select the relevant Assessment Year (AY). For the financial year 2022-23, which spans from 1st April 2022 to 31st March 2023, the applicable AY is 2023-24.
5th Step: Fill in your complete address.
6th Step: Enter the captcha code and click on ‘Proceed’.
Step 3:
Review all the details you’ve entered, then submit the request to your bank. You will be redirected to the bank’s payment page.
Step 4:
Check the Receipt (Challan 280)
After successfully completing the payment, you will receive a tax receipt on the next screen, displaying your payment details. The BSR code and challan serial number will appear on the right side of the challan.
Note: Save your tax receipt or take a screenshot. You will need the BSR code and challan number when filing your tax return.
Steps to File Income Tax Return After Payment
Once the online income tax payment is successfully processed, individuals must report it in their income tax return. To do so, simply navigate to the "file income tax return" section on the official income tax website.
Advance Tax Payments
Advance tax is applicable to individuals who have tax liabilities exceeding Rs. 10,000. Generally, salaried individuals have their taxes managed by their employers through TDS. However, high-income earners are required to utilize the advance income tax online payment system to pay their full tax liabilities.
The following scenarios necessitate the payment of advance income tax:
- When tax dues from sources like capital gains, rental income, or interest earned exceed Rs. 10,000.
- For self-employed individuals, freelancers, and business owners.
How to Calculate and Pay Advance Tax
To calculate the required advance tax, one must first determine their taxable income. This involves summing earnings from:
- All sources of income, including salary, capital gains (from Mutual Funds, shares, etc.), interest, and more.
- Freelancers should estimate their annual income and subtract applicable expenses such as rent, travel costs, and other business-related expenditures.
- Next, apply the deductions available under Sections 80C, 80CCD, and 80CCC of the Income Tax Act.
After calculating the deductions, individuals can determine their taxable income. The advance tax payable is then computed based on the applicable income tax slab rate for the individual.
Here is the table outlining the due dates for Advance Tax payments:
| Due Date | For Respective Individuals |
| Before 15th June | 15% of the total advance tax |
| Before 15th September | 45% of the total advance tax |
| Before 15th December | 75% of the total advance tax |
| Before 15th March | 100% of the advance tax |
Failure to pay the required advance tax on time will result in penal interest charges under Sections 234C and 234B.
In addition, some taxpayers may have outstanding tax to pay when filing their income tax return. This is referred to as “self-assessment tax,” and it can be paid online during the return filing process to ensure the successful submission of the return.
Interest payments on the due tax amount under Sections 234C and 234B are also required when paying self-assessment tax online. By keeping these points in mind, filing the income tax return after making online payments becomes a smoother process.
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