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Income Tax Payment for TDS, Advance Tax, Self Assessment Tax and Penalties

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Advance Tax
ITR Penalty
Self Assessment Tax
Surcharge
Last updated on July 10th, 2021

The procedure of payment of income tax can be completed on the TIN-NSDL portal. It’s one of the major sources of revenue for the government. And it is how they can invest in developing infrastructure and maintain it. In India, the central and state-level government has a right to collect taxes.

How much tax one pays will depend upon how much they earn and what slab do they fall in. The basic exemption limit for Individuals and HUFs below the age of 60 years is INR 2.5 Lakhs in AY 2019-20.

The different types of income tax / income tax payments In India are given below:

Income Tax Payment in the form of TDS

Tax Deducted at Source is a way to tax income when it is generated. so as to prevent tax evasion. TDS is applicable on payments like salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. Deduction of TDS depends on the rate (which varies by the nature of payment) prescribed by the Income Tax Act of India.

The Entity who is responsible to deduct TDS shall apply for TAN (Tax collection Account Number) and is liable to issue a TDS certificate. Deductor is also responsible for the TDS payment.

Income Tax Payment in the form of Advance Tax

Advance Tax is a tax liability where a taxpayer pays its dues in installment in the same financial year. Anyone whose tax liability exceeds Rs 10000 is required to pay Advance tax. As of 2016-17 taxpayers under the presumptive taxation scheme will have to pay their due before 15th March. Advance Tax payments and calculation will depend on the nature of the taxpayer’s income and professional. For salaried individuals whose only income source is salary, they do not have to pay advance tax. Freelance and Professionals have to estimate their annual income before calculating their tax payments. Taxpayers can pay advance tax in one of two ways: Either They can pay it through advance tax challan or they can pay it using Net Banking Facility.

280 challan

Income Tax Payment in the form of Self Assessment Tax

Self Assessment Tax is tax liability computed by the taxpayer on its own and paid before filing IT Return. A taxpayer does not have to pay it if their actual dues are less than Advance Tax and TDS combine. Payment is done in one of two ways: Either they can pay self-assessment tax challan or they can do it through Net Banking facility.

Surcharge: A Tax on Tax

A surcharge is an additional tax levied by a government on assessees whose income exceeds Rs 50 lakhs. The calculation of surcharge is on income tax and not the actual income. The rate applicable for surcharge depends on the policy for that particular assessment year.

Cess: A fundraising Tax

The government collects cess for a special cause like education, health, etc. And unlike other taxes mentioned above, it is collected for a particular period and might be altered or completely removed.

Indian Government collects different types of Cess Like Education Cess, Swachh Bharat Cess, Krishi Kalyan Cess, Infrastructure Cess, etc. The rate of the deduction depends on the financial policy for a particular assessment year.

Tax Penalties

With taxes comes penalties. The government collects interest on tax payment as a form of penalty from a taxpayer.  Each of the taxes discussed above has a particular due date and if assesses failed to pay till the prescribed due date there is a penalty.

Penalties on TDS

Late Filing Fee – Section 234E: If TDS is not filed after the due date then it attracts a penalty of INR 200 every day from the due date until it is filed by the taxpayer.

Interest – Section 201A: Failing to deduct TDS till the due date attracts interest.

Penalty – Section 271H: penalty of a minimum of Rs. 10,000 under this section.

Prosecution – Section 276B: imprisonment for a minimum of 3 months under this section.

Penalties on Advance Tax

Non Payment of Advance Tax – Section 234B: Interest at 1% in case the taxpayer fails to pay 90% of their tax liability in same the financial year.

Delay in Payment of Advance Tax – Section 234C: if there is a delay in tax payment than interest @ 1% is applicable.

Penalties on Self Assessment Tax

Defaulting – Section 221(1): if a taxpayer fails to pay the tax within due date then the penalty amount decided by assessing officer needs to be paid by the taxpayer.

Paying Taxes in India

A taxpayer can either choose to pay taxes online or offline

Paying Tax Online

In order to pay tax online one has to go to TIN NSDL e-payment and select INTS 280 and enter the necessary details  

Paying Tax Offline

Visit the nearest bank branch and get the challan form i.e. form 280. Fill in the necessary details and submit the money and form to a bank official, for which one will get a receipt.

one can inquire about the status of income tax payment online by going to TIN NSDL e-payment and download challan status inquiry form.

FAQs

What is a surcharge?

A surcharge is an additional tax levied by a government on assessees whose income exceeds Rs 50 lakhs. The calculation of surcharge is on income tax and not the actual income. The rate applicable for surcharge depends on the policy for that particular assessment year.

What are the penalties under Advance Tax?

– Non Payment of Advance Tax – Section 234B: Interest at 1% in case the taxpayer fails to pay 90% of their tax liability in same the financial year
– Delay in Payment of Advance Tax – Section 234C: if there is a delay in tax payment than interest at 1% is applicable

What are the different types of penalties under TDS?

– Late Filing Fee – Section 234E: If TDS is not filed after the due date then it attracts a penalty of INR 200 every day from the due date until it is filed by the taxpayer
– Interest – Section 201A: Failing to deduct TDS till the due date attracts interest
– Penalty – Section 271H: penalty of a minimum of Rs. 10,000 under this section
– Prosecution – Section 276B: imprisonment for a minimum of 3 months under this section

Got Questions? Ask Away!

  1. Hey @TeamQuicko

    I have LTCG of more than 7 lakhs from the equity for this year. Is there a way to reduce my tax liability? Also, do I have to pay the tax in advance? If I fail to do so, what will be the penalty/interest percentage I have to pay during my tax filing in 2020?

  2. Hi @vivek25,

    You are liable to pay advance tax if your total outstanding tax liability for the financial year after TDS is above INR 10,000.

    To calculate your advance tax liability you need to add your estimated income for the financial year from all sources including - Salary, House Property, Capital Gains, Business & Profession and other sources.
    Next, subtract all eligible deductions, expenses, and Tax Credit available to you.
    Now, if your outstanding tax liability is above INR 10,000, you need to pay advance tax to avoid penalty u/s 234B and 234C.

    Hope this answers your query :slight_smile:

    You can also use the advance tax calculator to know your advance tax liability under the old and new tax regime

  3. Hi
    When I pay the advance tax through the ZERODHA-QUICKO platform, does it get saved/stored? For example I have paid for Q1. so when I have to pay for Q2, will this be automatically calculated?
    Thanks

  4. I have paid the Advance tax of Q1, but didn’t received any email from income tax portal! So, Is that normal? I received the Challan No. receipt, but no email from IT portal!

  5. Hey @Gaurav,

    Once you pay the Advance Tax, you have an option to download the challan. In case you missed downloading it, the tax credit for the same will be reflected in your Form 26AS.

  6. Hey Girimon_Vasudevan,

    When you pay advance tax through our tax planner app, you should download the challan and then you
    need to add the it the advance tax toggle under the tax credits in the tax planner tab to see your tax credits reflected in the appropriate quarter.

  7. @Nireka
    Thanks. I have done it for the current year.
    I did not do it for the last year. How can I add it now?

  8. Hi @Girimon_Vasudevan,

    If you missed paying advance tax last year, then the interest penalty may be applicable u/s 234B & 234C.
    You can pay that as along with your self-assessment tax the filing your Income Tax Return

  9. Sorry, I didn’t miss the payment. I missed to add it in the tax credit on your portal. I am unable to add it now.

  10. @Girimon_Vasudevan, once you login to the Tax Planner navigate to Tax Planner > Income Situation > Tax Credits to add the tax credits.

    If you face any issue can write to us at help@quicko.com and our team will be happy to assist you.

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