Income And Other Direct Taxes & How To Pay Tax Online

Income And Other Direct Taxes & How To Pay Tax Online

If you know how to Pay Tax Online then it will save you a lot of money and time. Study shows that businesses and individuals spend more than 6 billion hours preparing their returns. Which is equal to three million full-time workers' labor for a year. Thus, pay tax online India is one of the most important factors for every single taxpayer.

There are three ways that a tax is deducted by the government; Advance Tax Payments, Tax Deducted At Source and Self-assessment taxes paid before filing your income tax return. You will have to pay advance tax if your tax liability is more than 10,000 in a financial year. If you are a salaried person, then your Income Tax will come under the TDS. Thus, you will not have to pay advance tax. Calculate your tax liability before filing your ITR to know if you are liable to pay self-assessment tax.

Types Of Direct Taxes 

There are two types of taxes- direct taxes and indirect taxes. Here are the types of direct taxes that are paid directly by the taxpayer to the government.

  • Income Tax 

Income tax is one of the best examples of direct taxes. This tax is calculated on the basis of the income of an individual. That means a certain percentage of your income will be taken by the government. The government has categorized incomes into different slabs such as Rs 5,00,000-Rs 10,00,000, Rs 250,000-Rs 5,00,000 and up to Rs 250,000. However, the percentage of taxes depends on the age groups and calculated differently. There are numerous pay tax online India options that you can try.

  • Capital Gains Tax 

If you sell an asset such as a real estate, a business or a stock then you will be charged Capital Gain Tax. The tax amount will be decided by calculating the difference between the selling amount and the acquisition amount. Since inflation can affect capital gains, these types of tax rate are lower in comparison to other taxes. Even a certain amount of capital loss can be claimed if an asset is sold for less than it was bought for.

  • Transfer Tax

The estate tax is the most common form of transfer taxes. A certain percentage of a deceased person's total amount of property including trusts and financial accounts will come under this tax category. When people transfer their properties to another individual then a certain amount is collected from the total property. This is called a gift tax which is also another common form of transfer tax.

  • Entitlement Tax 

Entitlement tax comes under the Federal Insurance Contribution Act. The federal government is responsible for collecting this tax to pay for social programs such as Medicare, Social Security, Medicaid and others. It will be deducted by the government from your monthly salary. Additionally, companies and self-employed people are also liable to pay entitlement taxes.

  • Property Tax 

Government levies property taxes on business and landowners. This type of tax is collected to finance public services such as schools, libraries, roads, police service and many others. It depends on the size of the property or business. However, these types of tax rates are relatively low. You can pay tax online property from the government website if your area.

These are the direct taxes that are collected by the government to maintain the economy of the country. There are several advantages and benefits to paying taxes directly. Here are the reasons for which you should pay taxes directly to the government.

  1. Certainty 

As long as you are paying direct taxes, your tax amount will be calculated before you have paid it. This is one of the good things to pay taxes directly because you will not have to worry about paying an extra amount of tax. For example, if your salary doesn't change, your Income Tax rate will remain the same.

  1. Equality 

Direct taxes promote equality and diversity among citizens and taxpayers. Because these taxes are based on your ability to pay. Every single taxpayer is charged differently, depending on how much they earn.

  1. Time & Money Saving Option 

Neither the government nor the taxpayer will have to spend time or money on these taxes. The government will not have to spend money to collect taxes from individuals and businesses. Because these taxes are collected at the source of income of a person. Pay tax online NSDL (National Securities Depository Ltd.) through net banking from any of the authorized banks.

How To Pay Tax Online 

Salaried individuals don't need to worry about paying their taxes as their employers will deduct the taxes from their salary through TDS. However, if you are a business owner or self-employed then you will have to do it on your own. Here are the steps that you should follow to pay income tax online.

Step-1

To pay tax online tin nsdl, visit https://www.tin-nsdl.com > Services > e-payment. Click on Proceed under Challan 280 option.

Step-2 

Provide Personal Details Properly. There will be many options visible on your screen. Choose the correct one for which you are going to pay taxes. If you are paying Income Tax then select 0021 option. Select the type of payment correctly. Options that you will see on the website are Advance Tax, Surtax, Tax On Distributed Profit, Tax On Distributed Income, Self Assessment Tax and Tax On Regular Assessment.

If you have any taxes due to pay before filing your income tax returns then select Self Assessment Tax and complete the payment.

There are two payment options available for paying taxes- Debit Card and Net Banking. You cannot use a credit card to pay any type of taxes in India.

Then you will have to select Assessment Year or AY. For example, from 1st April 2018 to 31st March 2029, the relevant Assessment Year is 2019-20.

Provide all the other details correctly such as PAN, Complete Permanent Address, Email, Mobile No and others. Enter the captcha code correctly and then click on Proceed.

Step-3 

After clicking on Proceed, a page will be displayed showing 'please confirm your information before proceeding'. Double-check all the information that you have provided on the page and provide your consent to NSDL e-Gov by ticking on the box 'I agree'. If everything is correct then click on the 'Submit to the Bank' button. Then you will be redirected to the net banking page of your bank. Complete your payment carefully after logging into your net banking account.

Step-4 

Once you have completed the payment through your desired payment option, you will get a receipt of the tax that you have paid. On the right side of the challan, you will see the challan serial number and BNR code. Take a printout of the screenshot of the same because the BRN no and challan serial number should be included in your tax return.

If you haven't downloaded your tax receipt copy then you can do that again by logging into your net banking account. To download the pay tax online HDFC receipt, login and click on 'Request' from the menu and click on 'Regenerate Direct Tax Challans'. If you want to download pay tax online SBI receipt then go to e-tax after logging in and click on 'Reprint Challan' from the sidebar. To pay tax online Axis bank and download the challan, login and go to Business Banking > Taxes > Direct Tax > Re-generate Cyber Receipt/Challan. After downloading the receipt from your bank website, enter the 7 digits BRN no and 5 digits Challan no on the Challan 280.

Also read: What is income tax?

FAQs On Direct Tax

● Is It Possible To Save Taxes?

Yes. You can save taxes by investing in certain funds and policies that are known as income tax-deductible.

● How can I save Income Tax through investments?

There are many tax-saving insurance policies, PPF, EPF and FD schemes that come under section 80C, 80CCC, and 80D.

● What is the disadvantage of Direct Tax?

Filing an ITR that comes under Direct taxes is a time-consuming process.

● What is an AY (Assessment Year)?

An assessment year is a financial year that starts on the 1st April of a year and ends on the 31st March of the next year.