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

Online e-Tax Payment – How to Pay Your Income Tax Using Challan 280?

Updated on: 29 Jul, 2024 05:19 PM

While many people anticipate receiving a refund when filing their income tax return, there are instances where you may owe additional taxes instead. This could happen due to underpayment during the tax year, adjustments in deductions, or changes in income. In such cases, you may need to make additional payments to the Income Tax Department to settle your outstanding balance.

If you're filing an original ITR, revised ITR, updated income tax return (ITR-U), or a belated return, you might encounter penalties and interest charges. Minor heads may change depending on the payment you are making. For example, If you are paying for some outstanding demand then you might need to choose Regular Assessment tax (400) or if you are paying regular tax then you need to choose self-assessment tax (300). Understanding how to make these payments online is essential for avoiding further complications and ensuring your tax matters are in order. Let’s get started!

Note:- Direct tax payments facility has been migrated from OLTAS 'e-payment: Pay Taxes Online' to the e-Pay Tax facility of the E-Filing portal. Users are advised to navigate to the 'e-Pay Tax' portal of the Income Tax Department at https://www.incometax.gov.in/ to make direct tax payments.


Contents

What is Challan 280?

Challan 280 is a type of income tax form that is used by persons to make payment of income tax on payment of self-assessment tax, advance tax, surtax, tax on distributed income and profit, and regular assessment tax. Challan 280 is also known as ITNS280. Whether paying your income tax online or offline, it is important to use challan 280 for each transaction.

To make the payment online, you need to visit the TIN NSDL website to finish the transaction. If you have opted for the offline method, you need to visit the specific bank branch along with the specified form.

How to pay income tax online?

Step 1: To begin, go to the official Income Tax portal at https://www.incometax.gov.in/iec/foportal/. Then, find and select "e-Pay Tax" from the menu on the left side of the screen, as shown in the image below:

To pay taxes online

Step 2: Enter the PAN/TAN details along with your mobile number. (If you're making the payment on someone else's behalf, use their PAN number; however, you can input your mobile number regardless of the payer). Subsequently, you'll receive a One-Time Password (OTP) on your registered mobile number. Enter the OTP and proceed by clicking 'continue.'

Fill in the required details
OTP will be shared with your mobile number

Step 3: Once you've entered the OTP, a new page will appear confirming the successful verification of your mobile number. Proceed by clicking the 'continue' button.

Once the OTP is verified

Step 4: On this page, you'll find multiple payment options available. If you're making an income tax payment such as advance tax or additional tax, locate the first payment box labeled 'Income Tax' and click on the proceed button.

filing your income tax returns

Step 5: Choose the assessment year and your payment type from the drop-down menu. If you're paying additional tax, interest, or a penalty for late ITR filing, select "Self-Assessment Tax (300)" and then click on 'Continue.'

click on Continue

Step 6: Fill the payment amount correctly under the relevant categories.

Select the mode of payment

Step 7: Choose your preferred payment method and bank to process the tax payment, then click on 'Continue'.
You can choose internet banking, debit card, credit card, RTGS/NEFT, UPI, or opt to pay at the bank counter.

Select the mode of payment

Step 8: Upon clicking 'Continue,' you'll be able to review the payment details. Ensure the payment information is accurate and Click 'Pay Now' to proceed with the payment, or select 'Edit' to make any necessary changes.

Select the mode of payment

Step 9: Mark the checkbox to agree to the Terms and Conditions and proceed with the payment by clicking on 'Submit To Bank'.

Select the mode of payment

Step 10: Upon successful submission of your tax payment, you will receive a confirmation.
Note: Ensure that you download the challan. You will require the BSR code and Challan number to complete the return filing process.

Got stuck at any steps, contact us! Our experts will assist you and make taxation easy for you.

Verification of Challan Tax Payment

The Income Tax Department (ITD) allows assessees to verify the status of their generated challans. This verification confirms the status of the challan. Assessees can also log in to the NSDL website to check the status of their payments. There are two ways to verify the status of a challan:

  1. CIN-based view: Assessees can provide details such as the Challan Identification Number (CIN), challan tender date, BSR code of the bank branch where the payment was made, and the serial number of the challan to track its status. They can also verify the accuracy of the tax amount paid by specifying the actual amount.
  2. TAN-based view: Assessees can provide their Tax Deduction and Collection Number (TAN) and the challan tender date to view the details of their Challan Identification Number (CIN). Additionally, they can specify the amount against a particular CIN to validate the amount uploaded by the bank.

Correction of details in Challans

An assessee can request changes to the challan payment information if any errors need rectifying. The following fields can be corrected:

  • Assessment Year
  • Tax Deduction and Collection Number (TAN) or Permanent Account Number (PAN)
  • Nature of the payment
  • Major Head Code and Minor Head Code
  • Total amount

Correction of Wrong Assessment Year When Making Income Tax Payments

The assessment year is when your taxes are assessed, which is the year following the one for which you are paying taxes.

If you made a mistake selecting the correct assessment year, follow these steps:

  1. When filing your IT returns, include the payment details even if the wrong assessment year was selected.
  2. Request a correction from your jurisdictional assessing officer, whose details can be found on the Income Tax Department's e-filing website.
  3. If you detect the mistake within 7 days of making the deposit, request the bank to correct the challan.
  4. The Assessing Officer (AO) will send a notice after processing your returns, as the payment details will not match the records.
  5. Respond to the notice with details of the error.
  6. Under Section 154, submit a rectification request for the error.
  7. If the AO verifies that your rectification request is accurate and genuine, they can make the necessary corrections in your challan, resolving the issue.

Banks Authorised for e-Tax Payment

Presently, Axis Bank, Bandhan Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, City Union Bank, DCB Bank, Federal Bank, HDFC Bank, ICICI Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, IndusInd Bank, Jammu & Kashmir Bank, Karur Vysya Bank, Kotak Mahindra Bank, Punjab & Sind Bank, Punjab National Bank, RBL Bank, South Indian Bank, State Bank of India, UCO Bank & Union Bank of India have been enabled for making tax payment through the e-Filing portal.

Benefits of Online e-Tax Payment

  • Convenience: Online payment methods offer a high level of convenience. Taxpayers can make payments from anywhere, anytime, as long as they have an internet connection. This eliminates needing to visit a tax office or mail a physical payment.
  • Time-saving: Online payment systems streamline the process, allowing taxpayers to complete their transactions quickly. It eliminates the need for manual paperwork, filling out forms, and waiting in long queues.
  • Accuracy: Online payment platforms often have built-in calculators that help taxpayers determine the correct amount of tax owed. This reduces the chances of errors in calculations and ensures accurate payment.
  • Instant confirmation: When making an online payment, taxpayers receive immediate confirmation that their payment has been processed. This provides peace of mind and eliminates uncertainty about whether the payment was received and credited.
  • Secure transactions: Reputable online payment platforms employ robust security measures to protect users' financial information. Encryption techniques and secure servers ensure that sensitive data is transmitted and stored safely.
  • Reminder notifications: Some online payment platforms offer reminder services, sending notifications to taxpayers when payment deadlines are approaching. This helps taxpayers stay organized and avoid late payment penalties.
  • Verification: By visiting the website of the Tax Information Network, you can verify if the IT department has received the payment or not.

Eligibility for e-Tax Payment

Starting from April 1, 2008, certain taxpayers are required to make their tax payments online. This mandatory requirement includes the following categories of taxpayers:

  • All corporate assesses: This includes all companies, regardless of their size or type of business.
  • All assesses (other than companies) to whom the provisions of section 44AB of the Income Tax Act, 1961 are applicable: This refers to non-corporate taxpayers who meet the criteria specified in section 44AB of the Income Tax Act, 1961. Section 44AB pertains to the mandatory tax audit requirements for businesses or individuals meeting specific financial thresholds.

Documents required for paying Income Tax Online

  1. Form 16
  2. Salary slips and bank statement
  3. Form 16A, Form 16 B, or Form 16C
  4. Interest certificates issued by bank or post office
  5. Form 26AS
  6. Tax saving investment proof
  7. Aadhaar Card
  8. PAN Card
  9. Home loan statement
  10. Capital gain Statement

Different Types of Challan that are Applicable for Various Tax Payments

  • Challan No. ITNS 280: This challan is used for the payment of income tax by individuals and non-corporate entities. It is used for the payment of advance tax, self-assessment tax, regular assessment tax, and tax on distributed income.
  • Challan No. ITNS 281: This challan is used for the payment of Tax Deducted at Source (TDS) by deductors. It is used for depositing TDS on salaries, interest, rent, commission, and other payments.
  • Challan No. ITNS 282: This challan is used for the payment of Securities Transaction Tax (STT), Hotel Receipts Tax, and other taxes.
  • Challan No. ITNS 283: This challan is used for the payment of Equalization Levy, which is a tax on specified digital services provided by non-resident companies.
  • Challan No. ITNS 284: This challan is used for the payment of Tax Collected at Source (TCS) by collectors. It is used for depositing TCS on sale of specified goods like scrap, minerals, etc.
  • Challan No. ITNS 285: This challan is used for the payment of Income Declaration Scheme (IDS) tax. It was applicable for a specific period and allowed taxpayers to declare undisclosed income and pay taxes on it.

The deadline to file ITR without penalty is 31st July 2024. File Today.

FAQs on Online Tax Payment

Q- Is it mandatory to pay tax online?

Online income tax payment is mandatory for all companies and all non-corporate taxpayers covered in audit under section 44AB. Apart from these, all other taxpayers can also pay their taxes offline after downloading challan 280 and submitting it to a bank, as mentioned in the above section.

Q- What should I do if my bank is not authorized for e-tax?

If your bank is not authorized to make an e-payment, you can use the account of any other person whose bank is authorized to provide the same facility.

Q- I need to find my counterfoil. What should I do?

Banks provide online facilities for the regeneration of challan on their website in case the counterfoil is misplaced.

Q- What to do when you have selected the wrong assessment year while paying tax?

If you have selected the wrong assessment year then follow the below-mentioned steps:

Step 1: Even if the assessment year you selected while paying the tax is wrong, provide the payment information when filing your IT returns for the year.

Step 2: You can ask your jurisdictional assessing officer's office to fix the challan for the 'assessment year' inaccuracy. On the income tax department's e-filing website, you may find the location of the assessing officer's office. If you have just paid a challan, you can request that the bank to amend the challan within 7 days after the deposit date.

Step 3: When the assessing officer (AO) examines your returns, he will most likely issue a warning since the payment information does not match the records.

Step 4: Respond to the AO with the specifics of the problem during the tax payment.

Step 5: You must also file a Section 154 correction of return.

Step 6: If your rectification request convinces the AO, he has the authority to make the appropriate modifications in your return. He will make the necessary modifications to the IT returns and shut it off after he has approved your request.

Q- What if my account gets debited twice for the same transaction?

If during the transaction you encounter any error and the amount has been debited twice, then while filing your Income Tax Return you can claim a refund for the excess tax paid from the Income Tax Department.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.