How to Pay Income Tax

E Payment –How to Pay Income Tax 

Income tax payment is made for -

    Advance Tax
    Self Assessment Tax
    Outstanding tax demand payment

Advance Tax

If you have annual tax dues of more than Rs 10,000, you must pay income tax in advance. Usually, for the salaried, these income tax payments are taken care of via TDS deductions by employer.

Situations when you have to pay advance tax:

    You are salaried but have high income from interest or capital gains or rental income
    You are a freelancer
    You are running a business

How to calculate and pay advance tax:

Estimate your Total Income: Add income from all sources. Include salary income, interest income, capital gains etc. Just like you would at the time of filing your income tax return. If you are a freelancer, estimate your annual income from all clients.

Freelancers have to Subtract Expenses: Freelancers are allowed to deduct expenses from their freelancing receipts. Rent of your workplace, internet, mobile bill, depreciation on computers, travel expenses etc. Read more here: Guide .

Allow deductions: Reduce deductions you want to claim in your tax return. Deductions such as thoe allowed under section 80C, 80D, 80E or any other than you want to claim. (See full list of deductions here). From your total income reduce deductions and arrive at your taxable income.

Calculate Tax due on total income: Apply the latest income tax slab rates on your taxable income to calculate your income tax due. Reduce any TDS that may have been deducted from your total tax due. And make sure you have paid according to these instalments. These payments of income tax can be made online.

Our CAs can calculate your advance tax liability and help you with paying it online.
Seeing a large tax outgo? Don’t worry, our CAs can help calculate your freelancing income and make sure your taxes are optimised.

 Self Assessment Tax

Your income tax return cannot be submitted to the tax department, unless you have paid tax dues in full. Sometimes, you may see tax payable at the time of filing your return. This income tax must be paid online, so that return is successfully e-filed afterwards. Usually, interest under section 234B and 234C will also have to be paid along with your tax due, if you are paying tax after 31st March.

When you are efiling with ClearTax, our system will automatically tell you how much tax you need to pay to file your return. You can also get your return verified from a CA and make sure your taxes are paid appropriately.

Outstanding tax demand payment

Sometimes you may have to make an income tax payment to comply with an income tax demand notice. If you agree with the assessing officer and are ready to pay the demand, such income tax can also be paid online.