The option of paying income tax online has greatly simplified the way people pay their due taxes. Compared to the previously prevalent offline methods, paying income tax online is faster, more convenient and more secure. Knowing the system of online tax payment is essential for ensuring that compliance is maintained and due taxes are paid in a timely manner. Read on to know the key steps involved in making online payment of income tax.

Online Income Tax Payment

Online payment methods have eliminated the long queues and tedious paperwork traditionally associated with tax obligations. The Income Tax Department of India provides an e-payment facility where users can log in, fill out their details, and complete payment of due income tax online using net banking, debit cards, or UPI.

Whether you’re paying advance tax, self-assessment tax, or tax dues as part of your regular assessment tax, online tax payment is now the most preferred method. This system is constantly updated to ensure user-friendly features, secure encryption, and smooth transaction flows.

Most people who learn how to make income tax payments online appreciate the built-in checks that reduce errors and misfiling. It also provides real-time confirmations and digital receipts that help make keeping tax records easier.

How to Pay Income Tax Online

While there are various ways in which online income tax payment can be made, the official Income Tax Department e-filing portal is perhaps the most convenient option. The site provides a simple interface for paying different types of direct taxes taxes such as advance tax, self-assessment tax, or even tax demand made by tax authorities after assessment.

To make income tax payments online, one needs to keep the following things in mind:

• Ensure you know your correct assessment year and the type of tax you owe.
• Select the correct challan type for online income tax payment.
• Finally, verify all details and pay you tax dues using Net Banking or a debit card.

Step 1: Access the Income Tax Portal

The e-Pay feature on the Income Tax e-filing portal is the designated system for direct tax payments in place of the earlier NSDL system as of July 2022. On the homepage, you will see various services, whether it is e-filing returns, checking the status of a refund, or paying taxes. Look for the section related to direct tax payment or “e-Pay Tax” as shown below:

Step 2: Provide Your Personal Details

On the next page, you need to provide your personal details such as PAN and Mobile Number registered with the Income Tax Department, as shown below:

Step 3: Use the Mobile OTP to Login

On the next page shown below, use the 6 digit One Time Password received on your registered mobile number to log in:

Step 4. Check Details Post Login

After providing the Mobile OTP, the below page is displayed which contains details of your PAN/TAN as well as portion of the name of the PAN/TAN holder as shown below. Click “Continue” to proceed:

Step 5. Choose the Applicable Tax Payment Type

On the subsequent page, you will find a list of tax payment options including Income Tax such as Advance Tax, Self-Assessment Tax, etc., as well as Demand Payment, Equalisation of Levy/STT/CTT and Fee/Other Payments as shown below:

Step 6. Choose the Assessment Year and Payment Type

Once you have made your selection of Income Tax payment, the subsequent page you will need to choose the Assessment Year and Type of Payment (Minor Head) as shown below:

Step 7: Provide Details of Income Tax Payable

You need to provide details of tax payable under various heads such as Tax, Surcharge, Cess, Interest, Penalty etc. Once these details have been filled, the system automatically shows the total income tax payment that needs to be made:

Step 8: Choose Your Mode of Online Income Tax Payment

Once the total tax payable has been computed, you will have to option to choose the mode of payment such as Net Banking, Debit Card, RTGS/NEFT, UPI, etc.

Step 9: Payment Receipt Download

Once your payment is successful, the system will generate an online receipt. This receipt will contain details such as:

• BSR Code
• Challan Serial Number
• Date of Payment

It is advisable to download and keep a digital copy/print out because you will need the details when filing your income tax return. This receipt is your proof of successful online income tax payment.
In case you lose the receipt, it can be retrieved by logging into the Income Tax e-filing portal.
 

Benefits of Paying Income Tax Online

Digital tax filing and online income tax payment offers more than just convenience. The process typically provides instant validation of your Permanent Account Number (PAN) and other details. This increases accuracy and minimises the risk of errors. Many banks also offer tax payment portal access through their Internet Banking platforms that allow swift online tax payment transactions.

Apart from convenience, online payments ensure immediate confirmation of tax credit in the taxpayer's account, reducing the risks of misplaced paper challans. With fewer manual steps, the overall speed of settlement is quicker. Those who have learnt how to pay taxes online, they rarely switch back to manual methods because of the clear advantages.

Common Issues and Troubleshooting

Despite the system’s efficiency, a few challenges can crop up in how to make income tax payments online.

Payment Deducted but No Receipt : This might be a temporary glitch and it is advisable to wait for 24 hours to check if the record is updated. If still not updated, contact your bank and check the Income Tax portal for transaction history before making a second payment.

Incorrect PAN or Assessment Year : You can fix this by raising a request through the e-filing portal’s correction process.

Session Timeout :  Avoid delays when filling out the details on the various pages. A stable internet connection is also required to reduce the chances of a session timeout.

Duplicate Payment : For duplicate payments, taxpayers must file a refund claim using Form 30 or adjust the excess amount when filing their subsequent return.