The payment of income tax is an important responsibility that individuals and businesses have to fulfill towards the government. The payment process involves calculating the amount of tax owed based on one’s taxable income, filing a tax return, and making the payment to the government by the due date.

Types of Taxes

 

Advance Tax

When tax is paid during the previous year itself, it is called Advance tax. For example, any tax paid during financial year 2023-24 for income earned in that year shall be treated as advance tax for Assessment Year 2024-25.

Self-Assessment Tax

Self-assessment tax refers to any balance tax that has to be paid by an assessee on his total income. This tax is paid after the end of the previous year, i.e., during the assessment year before filing the I-T returns. The assessee himself determines the income tax payable.

Tax on Regular Assessment

Tax on regular assessment is the tax that a taxpayer is required to pay against a notice of demand from the Income-tax department. This tax is paid after the income tax department does the assessment.

When to make Payment of Tax

The first step is to calculate your taxable income, which is the income on which tax is levied. The tax rates vary based on the income slabs and the category of the taxpayer.

The next step is to file Income Tax Returns (ITR) with the Income Tax Department. The due date for filing ITR is usually 31st July of the Assessment Year (AY) for individuals.

Process for payment of tax

Before filing the ITR, tax payable or refundable is calculated, and tax must be paid by the due date. Payment of taxes can be made both online and offline.

  • Online Payment: Online payment can be made through the Income Tax Department’s website www.incometax.gov.in
  • Offline Payment: Offline payment can be made through Challan No. ITNS 280. It can be deposited in any authorised bank branch by cheque or DD.

It is important to note that if you do not pay Income Tax before the filing of ITR or by the due date, you have to pay interest on the outstanding amount as per the Income Tax Act, 1961.