financial services

Making Tax Payments Simplified


We’ve all talked a lot about how returns are filed, how taxes are calculated and what income tax deductions to apply to maximise our savings. But no one seems to be talking about paying the actual amount to be paid as tax, perhaps, because it is done by our employer for us. Others may take the help of a CA to get it done.

But a little tax knowledge wouldn’t hurt especially if you can’t bring yourself to trust people who handle your money. If you know a little economics, you would understand that levying taxes influences people to save. Savings can be invested back into the economy. Capital accumulation helps kick-start new projects and leads to much needed infrastructure growth. This leads to more trade, more commerce and in turn more employment and higher salaries. Higher salaries mean more savings and so the cycle continues.

Direct taxes are those that are collected directly from the taxpayer. These create a right on the part of the state and a corresponding obligation on the part of the citizen or entity subject to this tax. Examples of this tax include income taxinterest tax, corporate taxes, gift tax and wealth tax.

Taxes are collected by the State in the following manner:

  1. Tax Deducted at Source: The Income Tax Act of 1961 enjoins upon every person who pays salary, commission or rent to deduct and pay through a designated bank, tax to the government at the prevailing slab rates shown above. For each category of TDS, different rules of the Act apply and those falling under certain sections can be tricky and may require the assistance of a trained professional. Read more here.
    For those making deductions from salary income in accordance with Section 192, Form 24Q, available on the income tax portal is to be filled in. A proof of tax payment document, also known as Form 16, is to be furnished to the person who is paid that salary.
    TDS is paid out every quarter. Apart from salary, this tax deduction is also applicable on capital gains, income from dividends, prizes, transfer of immovable property and so on.
  2. Voluntary contributions of tax:
    1. Advance Tax: Salaried tax assessees with other sources of income such as interest on dividends or bank accounts (in the latter case, interest earning greater than Rupees 10,000 in a year) are responsible for paying advance tax every quarter. The last date for making such payments is usually the 15th of the last month of every quarter.
    2. Self-Assessment Tax: Because it is your responsibility to pay income taxes on any earnings you make, you must pay the balance remaining after deduction of TDS and Advance Tax, if any, via self-assessment tax. This tax should be paid before filing income tax returns to avoid penalties or late payment interest.

You can make voluntary payments to the Income Tax department using Challan ITNS 280. Such tax payments can be made both online and offline.
You must visit the income tax official website and navigate to the e-payments link. Choose the correct form and then select whether you’re a company or an individual. Give your PAN number and choose the assessment year for which the payment has to be made. You can fill in the details of income as asked and the website will calculate the amount of tax due. For more information click here.

  1. Tax Collected at Source: This is tax that is paid by the receiver or seller of a good.

For a sample calculation of your tax liabilities use this calculator. Salaried individuals may explore what constitutes their income and what tax exemptions apply to them here.

CA assisted tax return efilings are the best option for you if you possess multiple sources of income.  AllindiaITR is one of the leading platforms to serve your tax needs. Owned and promoted by Corwhite Solutions Private Limited, it is also the producer of one of the most successful efiling tax apps for smartphones in the country.

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