How To Pay Income Tax Online? Step-By-Step Guide.

. 6 min read
How To Pay Income Tax Online? Step-By-Step Guide.

How Can I Pay My Income Tax Online And More.

  1. India, like several other countries, follows a progressive income-tax structure which brings in high-income earners into higher tax rate slabs.
  2. Any person or entity is liable for the payment of income tax.
  3. Digital adaptation today is a moment of change for businesses that can leverage technology to produce an excellent user experience.
  4. All types of businesses have realised their importance, whether small, medium, or large business houses.
  5. So online tax payment facilities with this digital advantage have enabled easier filing of income tax returns.

A Guide to Online Income Tax Payment in India

  • Taxes are necessary for any nation to develop, and income tax is the main source of revenue for a government, which is then used for the upliftment of major sections of the country.
  • Income Tax is a category of direct tax imposed by the Government of India on all income (other than that produced from agriculture and related activities), as per the Income Tax Act, 1961.
  • It applies to the taxable income earned by individuals, firms, members of a Hindu Undivided Family, Limited Liability Partnerships, companies, local authorities, as well as any artificial juridical person.
  • On failing to pay the requisite taxes, the entities outlined in the income tax act can penalise you and further subject you to legal actions.

Income Tax and Its Categories

  1. Direct and indirect taxes are the two types of taxes in India.
  2. The former is paid to the government directly, while the latter is spent on buying goods and services from the third parties through various forms such as VAT, service tax, and others.
  3. Third parties, in turn, pay it to the government.
  4. GST or Goods and Services Tax has substituted all taxes relating to business owners.
  5. When Corporations pay this tax on the profit they make from their businesses, it is called a corporate tax.
  6. However, when individuals pay tax to the government on the income they get, it is called income tax.

Documents needed for online payment

  1. PAN or permanent account number detail,
  2. Income details, expenses or deductions, and taxes to be paid,
  3. Form AS 26 which is a proof of taxes paid till now,
  4. Description of extra income details which may include information such as rent on the property, gaining through the lottery, wealth gains through shares, and others.
  5. Also, a debit card or means to net banking and good internet connectivity.
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Who Can Pay Income Tax Online in India?

Anybody is eligible to pay taxes online. However, online tax payment is obligatory for:

  • Companies
  • Individuals subjected to the terms of Section 44AB

According to 44AB, those who are compulsorily required to get their accounts audited and liable to pay tax are:

a) A person with a business with its entire sales, gross receipts, or turnover for the year exceeds Rs. 1 crore. It does not apply to those opting for presumptive taxation under section 44AD​ , and the total sales or turnover does not exceed Rs. 2 crores.

b) A professional, if the gross receipts in profession for the year exceed Rs. 50 lakhs.

What Are the Steps for Income Tax Online Payment in India?

  1. Go to the official government income tax e-filing website and then log in.
  2. Go to the e-payment section and choose the challan number/ITNS-280 and click proceed. It will redirect to

3. Fill in the personal information which may include PAN, address, the assessment year, phone number details, email ID details, the bank name, and the captcha code.

4. Then validating the details by confirming is necessary. Here the taxpayer can choose from multiple options like the debit card as the payment method or net banking.

5. On confirming the details, it will prompt the user to make the payment for which entering the debit card or net banking details are necessary.

6. Successful payment of tax will enable a generation of challan counterfoil, which will include the details of the payment done.

7. After that download and print this challan.

Income Tax Slabs

  1. Individual income earning in India shows a diverse range, hence, levying a tax on all individuals is also diverse so that it becomes a reasonable policy.
  2. The Income Act, consequently, separates income limits and implements tax at different rates as per the limits.
  3. These ranges are called tax slabs.
  4. The tax slabs also differ based on individual age.
  5. Income tax slabs are revised and changed every year on the Budget Session.
  6. Let's have a close look at them.

A. For Individuals

1) Individual who are residents and whose age is less than 60 years, have the following slabs:

2) Individual who are residents and whose age is more than 60 years and up to 60 years, have the following slabs:

3) Individuals more than 80 years of age  have the following slabs

The surcharge covers 10% of Income tax in case total income surpasses Rs.50 lakh, 15% of Income tax in case total income surpasses Rs.1 crore, 25% of Income tax in case total income surpasses Rs.2 crore and 37% of Income tax in case total income surpasses Rs.5 crore. In all above cases 4% of educational cess is in addition.

B)For Partnership Firms

It is taxable at 30% with surcharge of 12% in case the total income exceeds 1 crore in addition to education cess of 4% education cess.

C) For Domestic Companies

It is taxable at 30%. If the turnover is less than or does not exceed Rs 400 Crore it is 25%.

In Conclusion

  1. So the impact of technology in the small and medium business has been huge.
  2. It has even benefited the tax payers by virtue of online payment options.
  3. With the role of technology, whether a company or an individual both can pay tax online with easy steps which take about just a few minutes.
  4. It is time-saving, safe and also simple, being only at our fingertips.

Also Read:

Income Tax: Difference between Old Regime & New Regime

How does the Income Tax System work in India?

The USA vs India: Taxation System


Q- How is the government promoting digitisation through taxation?

Ans- In an effort to promote digital payments and the lesser use of cash, the finance ministry of India has reduced the rate of deemed profits that are liable to tax under the 'presumptive scheme for businesses'.

  1. For the small business in business related to trading, production, or wholesale or retail going for the presumptive scheme of taxation, which is under 44AD.
  2. Previously 8% of total turnover or the gross receipts were used as net income liable to tax.
  3. But the government, in an effort towards supporting digital businesses and building a less-cash economy, has provided incentives for the small businesses by providing a lower rate of 6% of deeming profits on the total turnover, providing a total tax savings of at least 40% approximately.

Q- How can one take advantage of the presumptive scheme of 6%?

  1. For this benefit, the government has a prerequisite for businesses to accept on their own, payments through digital means.
  2. Other advantages are ease in taking loans from banks, on account of transparency and transactions being white, income tax scrutiny is less.

Ans- In India, the small businesses are ordinarily run as a proprietorship, a partnership or a small company. Proprietorship includes business run by owners. Partnership firms are those that are set up as per the Indian Partnership Act, 1932. Small companies are set up under the Companies Act. Again a specific kind of partnership, namely Limited Liability Partnership (LLP), can be set up by the Ministry of Corporate Affairs. Small companies have special tax provisions.

Q- Is the audit of a Limited Liability Partnership (LLP) accounts necessary?

Ans- As laid down by the ministry of corporate affairs that holds if the turnover surpasses Rs 40 Lakhs or if the contribution surpasses Rs 25 Lakhs then the accounts of LLPs are required to be audited.

Q- How is an LLP required to file the Income Tax Return online?

Ans- Income Tax Return can be filed in Form ITR 5 and for online process digital signature of the Designated Partner (DP) is necessary.