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At times one needs to pay income tax to the government for example Advance Tax, Self Assessment Tax. One can pay it through Challan 280 online or offline. This article discusses about when does one need to pay Income tax, how to pay through Challan 280, verify tax paid, how to correct details if required, how to mention it in Income Tax Return.

How does the Government collect Income Tax from an individual?

It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly. Taxes are collected throughout the financial year by three means:

  1. Voluntary payment by persons into various designated Banks. For example Advance Tax and Self Assessment Tax
  2. Taxes deducted at source (TDS) on your behalf from the payments receivable by you.
  3. Taxes collected at source (TCS) on your behalf at the time of spending.
What is Advance Tax?

If the tax payable, in a financial year, is Rs. 10,000 or more(after taking TDS  in consideration), then the tax is paid in the previous year itself. This is called as Advance Tax. Our article Advance Tax:Details-What, How, Why discusses it in detail.

  • Ist installment (30% of estimated tax) before 15 Sep,
  • IInd installment ( 60% of estimated tax) before 15 Dec,
  • Final installment (100% of estimated tax) before 15 Mar
What is Self Assessment Tax ?

If at the time of filing of return you find that you have some balance tax to be paid after taking into account your advance tax, TDS  and TCS, the short fall is to be deposited as Self  Assessment Tax.  Self assessment tax  must be deposited before filing return. For FY 2012-13 last date of filing return is 31 July 2013. In many cases one has not deposited full tax or Tax deducted at Source (TDS) has been deducted less ex: Interest on Fixed Deposit (FD)  is deducted at the rate of 10% if interest income is more than 10,000 a year. But actual tax on interest on FD is as per one’s income Slab . In such cases there is balance tax liability or due to interest u/s 234B, 234C if advance tax not paid or due to other reason. 

If you pay less than what you should pay as per your computation of tax before filing Return , your return may be treated as defective return as per Section 139(9) and may be liable to penal consequences.   You will be sent  an intimation which is a demand notice in itself. You may be charged with penalty under section 220 if the new demand is not paid within 30 days of service of notice.(Ref: TaxWorry Self Assessment Tax must be paid before filing the return)

What is Regular Assessment Tax?

Tax one needs to pay when demand is raised by Income Tax Department during assessment. Such tax is called as Regular Assessment Tax. For Ex: I am working in a company and don’t have any extra source of income.Due to some mistake company didn’t deducted tax in AY2010-11 and later I have received an intimation (actually received a demand u/s 156 ) under section 143(1) (India) to pay income tax. (Ref: Yahoo question)

How to pay Income Tax due – Advance Tax, Self Assessment Tax etc?

Tax Payment Challan, ITNS 280 Challan is used to pay Income Tax due, if any.

 What is Proof of Paying Income Tax through Challan 280?

After the taxes are paid through Challan 280,you will get a receipt or counter foil as acknowledgement for the taxes paid. Receipt has details of person paying the tax, amount, type of payment etc and Challan Identification Number (CIN) as shown in the receipt of e-payment of Income Tax below.The challan identification number has to be cited in the return of income as of tax payment. CIN can also be cited in any further queries about the tax payment.  CIN comprises of the following :

  • Seven digit BSR code of the bank branch where tax is deposited
  • Date of Deposit (DD/MM/Year) of tax
  • Serial Number of Challan
  • Example of CIN: 0000762 020208 32
Challan 280 receipt

Challan 280 receipt

When should I pay the tax?

Avoid paying the tax on last day. Quoting from Livemint’s Why paying advance tax on last day could be a problem usually if paying by cheque

If you are liable to pay advance tax by 15 September, but pay it even a day late, you would end up paying interest on the entire instalment of advance tax for a period of three months till the next due date, that is 15 December usually if paid by cheque.

Very often, such payment is made by a cheque drawn on a bank other than the bank receiving the advance tax payment. In such cases, the payment of advance tax is tendered on 15 September, but realised after 15 September. In such cases, earlier the Central Board of Direct Taxes (CBDT) had clarified that the date of tender was to be taken as the date of payment, in accordance with the Treasury Rules, and accordingly no interest was chargeable for late payment in such cases. That is why the receiving bank would normally enter both the date of tender as well as the date of realisation in the stamped copy of the challan acknowledged by the bank.

The Central Government Treasury Rules were replaced by the Central Government Account (Receipts and Payments) Rules, 1983, which provide that when the payment is made by cheque or draft, the payment shall be deemed to have been made on the date on which it is cleared and entered in the receipt scroll. Since then, the tax authorities have been trying to levy interest in such cases where the cheques have been realised after the due date of payment.Centralised Processing Centre (CPC) while processing tax returns picks up the date of payment of taxes from the Tax Information Network (TIN) server. In many cases, TIN records the date of clearance of the cheque as the date of payment and not the date of tender. 

Verifying Challan

You can verify the challan online. On receipt of the amount, receiving bank will upload the details in the Challan to Government via NSDL through its OLTAS (Online Tax Accounting System) return within 3 working days. To verify visit TIN webpage click on Challan Status Enquiry which will take you to TIN’s Challan Status Enquiry webpage. You can select either

  • CIN Based View : Where one enters CIN and amount (optional), deductor can view the following details:
    • BSR Code
    • Date of Deposit
    • Challan Serial Number
    • Major Head Code with description
  • TAN based view: By providing TAN and Challan Tender Date range for a particular financial year , the tax payer can view the following details
    • CIN
    • Major Head Code with descriprtion
    • Minor Head Code
    • Nature of Payment
    • Name of Tax Payer

If the tax payer enters the amount against a CIN, the system will confirm whether it matches with the details of amount uploaded by the bank.

If the entry is missing over here, after 3 working days [from the date of issuing counter foil], deductor should contact the Bank Branch to check the matter.

After paying income tax through Challan 280 what next?

You can verify challan using CIN in reciept online through your Form 26AS or through Challan Status Enquiry on  TIN webpage. You also need to quote CIN number while filing your income tax. Our article , Challan 280: Payment of Income Tax, discusses verification, correction process in detail

If you have paid Self Assessment tax through Challan 280 fill in the details in Tax paid and make sure that your tax liability is 0 before submitting the return  as explained for ITR1 in our article Fill Excel ITR1 Form : Income, TDS, Advance Tax  Our article Self Assessment Tax, Pay Tax using Challan 280, Updating ITR discusses it in detail.

Fill Self Assessment Tax Details in ITR using Challan 280

Fill Advance Tax Details in ITR using Challan 280

Reprint Challan 280

Income Tax Returns can be filed only if we have paid the Tax due to the government. If you submit the ITR without paying then your Income Tax Return can be declared Defective.

After paying Self Assessment/Advance Tax one needs to download the Challan 280 reciept and update Income Tax Return. But at times many people forget to download the receipt. Most of the bank offer the facility of re-generation of Cyber Receipt/ Challan for the e-Payment of Direct Taxes through TIN-NSDL website.

Banks upload challan details to TIN in 3 working days basis after the realization of the tax payment. On the day after the bank uploads the details of self assessment/advance tax to TIN, it will be automatically posted into your Form 26AS.

But what if you want to get details of your challan now and can’t want for Form 26AS Updation. For example filing ITR near the deadline. Then you need facility to regenerate Challan 280/reprint Challan 280. Many Banks provide this facility. We have updated details from SBI, HDFC bank and ICICI Bank in our article Reprint Challan 280 or Regenerate Challan 280

Correction of Challan 280

Quoting from IncomeTax webpage Challan Correction (pdf)

The physical challans of all Direct Tax payments received from the deductors / taxpayers are digitized on daily basis by the collecting banks and the data transmitted to TIN (Tax Information Network) through link cell. At present, the banks are permitted to correct data relating to three fields only i.e. amount, major head code and name. The other errors can be corrected only by the assessing officers. Under this mechanism, for income tax payments made on or after 1.9.2011, the following fields can be got corrected through the concerned bank branch

Assessment Year, Major Head Code, Minor Head Code, TAN or PAN, Total Amount, Nature of payment ( TDS Codes )

The time window for the correction request by tax payer is as follows :

S.No Correction required in Field name Period of Correction Request(from Challan Deposit Date)
  1  TAN/PAN  7 days
 2  Assessment Year  7 days
 3  Amount  7 days
 4  Other fields (Major head, Minor head,Nature of payment)    Within 3 months

The time window for correction by the bank is 7 days from the date of receipt of correction request from the tax-payer.

Procedure of Challan correction by Assessing Officers (both physical and e-payment challans)

After the window period available to banks for challan correction, the assessee can make a request for correction to his or her assessing officer, who is authorized under the departmental OLTAS application to make such correction in challan data in bonafide cases, to enable credit of the taxes paid, to the concerned assessee.

Income Tax credited to your PAN: Form 26AS

If you are a taxpayers, you need to check your Form 26AS to ensure the tax deducted at source (TDS) is reflected correctly in the income tax records. Form 26AS is a consolidated tax statement issued under Rule 31AB of the Income Tax Rules to PAN holders. This statement will include details of:

  • Tax deducted at source (TDS)
  • Tax collected at source (TCS)
  • Advance tax, self-assessment tax, regular assessment tax etc deposited in a bank by taxpayers (PAN holders)

Any Tax paid by PAN holder should be reflected in Form 26AS. So verify Form 26AS also for Advance tax, self-assessment tax, regular assessment tax etc deposited . Our article Viewing Form 26AS on TRACES explains it in detail.

How is income tax paid such: Advance Tax , Self Assessment Tax accounted for?

While filing the income tax return one has to fill information about the Advance Tax, Self Assessment Tax paid. For example from our article Filling ITR-1 : Bank Details, Exempt Income, TDS Details one needs to the tax paid.

Tax paid accounted in Income Tax return

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