Income Tax Online Payment - Checklist and Steps Involved

As our income grows and we become liable to pay taxes, we get to know about various types of taxes in India. The government – both state and central, collect these taxes for the economic welfare of the country in several facets including health, education, infrastructure, and welfare schemes. Out of all these government taxes, there is income tax – known to all but applicable to a limited proportion of the earning population.

As a direct tax charged by the Central Government in India, Income tax is applicable to the income of Indian citizens and is calculated as per the prevailing tax slab rates. Since the advent of the income tax e-payment procedure, most tax professionals have started paying taxes online for their clients. However, business owners can do this by themselves after knowing the steps involved.

Here’s everything you need to know about income tax online payment, benefits, eligibility, steps, and more.

Who Can Make Income Tax Online Payments?

Like many other countries, India also follows a progressive tax system in which individuals earning higher income fall into higher income tax slabs. Those who are liable to pay this tax are eligible to file income tax returns. Besides this, you can file a nil tax return even if the income is less than the taxable limit to avail of various benefits like loan access.

As defined under the Income Tax Act, the following individuals are liable to file tax returns and can make income tax e-payment online:

Indian citizens having an annual income of Rs. 2,50,000 or more under both new and old tax regimes (as per the Income Tax Department.)
Indian senior citizens (aged 60 and above) who have an annual income of more than Rs. 3,00,000
Cooperative society, Artificial Juridical Person, or Firm (falling under Section 44AB guidelines)
Indian residents having property or financial interest in an external entity outside India
Assessee responsible to produce returns under Section 139 (4B)
All companies

Now, here’s what makes most individuals switch to making income tax e-payment online –

Benefits of Online Tax Payment

You can pay the taxes at your convenience and transfer funds directly to the government.
You can pay taxes from anywhere using the net banking facility.
You will have access to the transaction ID in your bank account for future reference.
The challan will be sent directly to the Income Tax Department.
You can check the status of your income tax online payment on the official website of the tax department.

Interesting Read: All About Net Banking Facility

Elements Involved in the Online Tax Payment Process

PAN

It is mandatory for all taxpayers to have a valid PAN card issued in their names to make income tax online payments. The card contains a 10-digit alphanumeric number called PAN that is to be used to log in to the tax portal.

TAN

Also known as Tax Deduction or Collection Account Number, TAN is another element required for online payment of income tax. It is mandatory for organizations to have TAN. Also, as defined under the Income Tax Act, 1961, the TDS (Tax Deducted at Source) is to be deducted before the payment is made to the IT department.

OLTAS

It is an abbreviation for Online Tax Accounting System and refers to the database that helps the tax department in managing the collection of tax across the country.

ERACS

It is an abbreviation for Electronic Return Acceptance and Consolidation System and is the interface that exists between you (the taxpayer) and the web-based utility to upload TDS, TCS, and Annual Information Return on the TIN system.

Interesting Read: A Comprehensive Guide to Tax Collected at Source (TCS)

Documents You Need to Make Income Tax Online Payment

Salary slips and bank statements
Form 16 (16A, 16B, and/or 16C)
Interest certificates issued by post offices or banks
Form 26AS
Investment proofs to avail of tax deductions as per prevailing laws and chosen tax regime
Aadhaar card
PAN
Capital gain statement related to the sale of mutual funds and/or property

List of Authorized Banks Accepting Income Tax Online Payment

United Bank of India
Union Bank of India
UCO Bank
Vijaya Bank
Syndicate Bank
Punjab National Bank
State Bank of India
Punjab & Sind Bank
Oriental Bank of Commerce
Jammu & Kashmir Bank
Indian Bank
IDBI Bank
ICICI Bank
HDFC Bank
India Overseas Bank
Dena Bank
Central Bank of India
Corporation Bank
Canara Bank
Bank of Maharashtra
Bank of Baroda
Bank of India
Axis Bank
Andhra Bank
Allahabad Bank

At this stage, you might also want to ask if one can only pay income tax online. The truth is – it is up to you to decide how you want to pay the taxes. If you prefer paying income tax offline, continue reading.

How to Pay Income Tax Online in India via Challan 280?

If you want to know how to make income tax payment online, given below are the steps you need to follow:

Steps to make income tax challan online payment

Step 1: Visit tin-nsdl.com and click ‘Services’ => ‘e-payment: Pay Taxes Online’

Step 2: On the redirected page, click ‘Proceed’ button under Challan No./ITNS 280

Step 3: Select (0021) Income Tax (Other Than Companies) as given under Tax Applicable rate

Step 4: Select the correct type of payment from the following:

(100) Advance Tax
(102) Surtax
(106) Tax on distributed profit
(107) Tax on distributed income
(300) Self-assessment tax
(400) Tax on regular assessment

Step 5: Select the preferred mode of payment – debit card or net banking

Step 6: Select the right assessment year (For the financial year starting from Apr 1, 2022, to Mar 31, 2023, the correct AY is 2203-24.

Step 7: Enter your complete address and the captcha code and then click Proceed

Step 8: Double-check the information displayed and then submit the request to the bank

Step 9: After successful payment, you will receive a receipt that contains all the details including tax amount paid, challan serial number, date of challan, and others

Steps involved in paying income tax offline

Other than the online income tax payment process, you can also pay it offline as defined below:

Visit the nearest branch of an authorized bank and ask for the applicable challan form (Challan 280) for income tax challan online payment.
Fill in the required details in the form and ensure that you enter the correct information.
Submit the form along with the tax payable either via cash or cheque (if paid via cheque, it should be in favor of the ‘Income Tax Department’).
Collect the stamped tax payment receipt and keep it safe as proof of income tax payment.
It may take up to ten days for the tax payment to reflect in Form 26AS (either as Advance Tax or Self-Assessment Tax).

Different Types of Challan Applicable for Income Tax Online Payment

Type of Challan	Description
ITNS 280	Meant for income tax and corporate tax
ITNS 281	Meant for corporate/non-corporate collectors or deductors of TDS/TCS
ITNS 282	Meant for the payment of Securities Transaction Tax (STT)
ITNS 284	Applicable to income/corporate tax in case of undisclosed foreign asset or income
ITNS 285	Equalization levy

FAQs

Is it mandatory to make income tax payments online?

No, as it is up to you to decide how you want to make the payment – either offline or online.

Which details are mentioned on the income tax receipt generated successful income tax online payment?

The receipt contains the details such as BSR code, tax paid, challan date, and challan serial number.

Which common mistakes should I avoid while paying taxes online?

You should avoid selecting the wrong assessment year and codes while paying taxes online. Seek professional help if required.

To whom should I contact on facing any issue when I pay income tax online in India?

You can contact the TIN call center for any issues at the NSDL website. Otherwise, contact your bank for issues related to payment processing.

How do I get to know if the online tax payment process is completed successfully?

You will receive a confirmation email on both SMS and registered email address linked to your account at the e-filing portal.

How long will it take for the online tax payment to be processed?

Once the tax return you file is accepted, it will take around 21 days for tax payment processing and refund processing.

What will be included in the total tax payable in a year?

The total tax payable can be calculated by summing all the income from one or more sources, availing applicable deductions, determining the total taxable income, and then arriving at the taxes as per the applicable income tax slab rates. You should also know that if your income falls between Rs. 50 lakh – Rs. 1 crore slab, a 10% surcharge will be applicable. If the income goes beyond Rs. 1 crore, a 15% surcharge is applicable on the due taxes. Besides this, 4% of the taxes (plus surcharge) is to be added in the form of health and education cess.

On the other hand, if your income is less than Rs. 5 lakh in a year, you can claim a tax rebate of up to Rs. 12,500 or due taxes, whichever is lower, as defined under Section 87A.