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Online Income Tax Payment – Procedure


Online Income Tax Payment – Procedure

Online Income Tax payment is a facility introduced by the Government of India (GoI). It is mandatory for the specified assessees to pay Income Tax using the online mode. Assessees not falling under the mandatory category can pay tax manually. Alternatively, such assessees may use the online mode.  Furnishing the hard copy of the challan at the designated bank is necessary for assessees paying tax manually. With the development of technology, the Government has upgraded the mechanism of payment of tax. For the convenience of taxpayers, the GoI introduced the e-payment facility. In this article, we look at the procedure for online payment of income tax payment.

Mandatory Online Payment

Private limited company, one person company and limited company are mandatorily required to pay tax using internet banking facility. Further, taxpayers other than companies may be liable to get their accounts audited as per Section 44AB. Such assessees are also required to pay income tax online mandatorily. Online income tax payment is mandatory for all companies and all non-corporate taxpayers covered by an audit under Section 44AB. However, a person not covered in the mandatory category can voluntarily pay income tax by using the e-payment mode.

Income Taxes That Can be Paid Online

The GoI allows assessees to remit the following kinds of taxes through internet banking facilities:

  1. Income-tax including corporate income tax
  2. Advance tax and Self-assessment tax
  3. Tax deducted at source (TDS)
  4. Tax collected at source (TCS)
  5. Securities Transaction Tax (STT)
  6. Wealth-tax and other direct taxes

Online Income Tax Payment Procedure

To make an income tax payment online, the assessee should use a net banking enabled account in an authorised bank. The taxpayer may not have a net banking enabled account. In such cases, payment can be made through some other person’s account. However, the tax should be paid in the assessee’s name.

Online Income Tax Payment
Online Income Tax Payment

Step by Step Guide to Online Tax Payment

  1. Visit the online tax e-payment website.
  2. Open the respective challan based on the payment type.
  3. After selecting the correct challan, the screen for providing details will be displayed. The taxpayer should provide the correct details in the challan.
  4. The assessee should provide all the requisite details correctly along with the correct Codes. The taxpayer should select his bank from the dropdown provided on the screen. The assessee should select the bank from which the assessee wishes to make the online income tax payment.
  5. The taxpayer should select the applicable bank. Also, the taxpayer should input the verification code appearing on the screen.
  6. After providing the verification Code, the taxpayer should click on the proceed button provided on the screen.
  7. On clicking on the proceed button, the NSDL software will display the details provided by the taxpayer in the Challan. The software also mentions the name of the taxpayer as per the database of the Income-tax Department. The system will also display the other relevant details from the PAN/TAN database with the Department. In case of Form 26QB, the name of the transferor and transferee will be displayed.
  8. If the name and other details as displayed on the screen are correct, then the taxpayer can proceed for making payment by clicking on the submit to bank button provided on the screen.
  9. On submitting the challan to the bank, the gateway of the bank will display on the screen. The taxpayer should log in to the account. Also, the taxpayer should input the details of tax, interest, cess, and penalty.
  10. After providing the details, the taxpayer should verify the details to check the correctness. Subsequently, the taxpayer should submit the challan to the bank for payment.
  11. On successful completion of the transaction, the challan of payment (i.e., receipt of payment) will generate and will display on the screen.
  12. Challan will contain Challan Identification Number (CIN) and other details. The taxpayer should preserve the hard copy as well as soft copy of the Challan for the records.

Check Income Tax Challan Status – Online Tax Payment Status Check

Using the Challan Identification Number, taxpayers can track online the status of their challans deposited in banks.

Challan Status
Challan Status

Challan Check

By entering Challan Identification Number (CIN, i.e. details such as BSR Code of Collecting Branch, Challan Tender Date & Challan Serial No.) and amount (optional), the taxpayer can view the following details:

  • BSR Code
  • Date of Deposit
  • Challan Serial Number
  • Major Head Code with description
  • Name of Tax Payer
  • Received by TIN on (i.e. date of receipt by TIN)
  • A confirmation should communicate that the amount entered is correct.

TAN based Check

Also, by providing TAN and Challan Tender Date range for a particular financial year, the taxpayer can view the following details:

  • CIN
  • Major Head Code with description
  • Minor Head Code
  • Nature of Payment

To know more about filing Income Tax Returns, click here.