Income-tax can be defined as that portion or percentage of an individual’s income that is paid to the Government for infrastructural development and paid off to the Government employees. The Income-tax which is paid by the taxpayers contributes a major part of the revenue to the Government. 

Taxes in India are classified into two categories that are mentioned below:

1. Direct Taxes are those taxes that are paid directly to the Government by the individuals. They can be further classified into two types i.e. Corporate Taxes which are paid by companies on the profit they are making from business and Income-tax which is paid by the citizens of the country to the Government.
   
   
2. Indirect Taxes are those taxes that are collected by a third party and then paid to the Government. Taxes collected on restaurant bills, movie counters, etc. are examples of Indirect tax. 

Every citizen of India who earns or gets an Income is subject to Income-tax may it be a resident or a non-resident of the country. The source of Income of a citizen might be from his salary or his pension or from a savings account or even prize money; all of them are liable for taxation.

Let us classify the various income obtained by the people of the country into the below mentioned Income heads according to the Tax Slabs.

• Income from salary – The income obtained from salary and pension is put below this head.
• Income obtained from other sources – Income obtained from Savings Bank Account or Fixed Deposit or prize money is considered under this category.
• Income obtained from house property – This income head deals with the rental income.
• Income from Capital Gains – This income is obtained by the sale of mutual funds, shares, etc.
• Income obtained from business and other professions – This is when a person is working as a freelance or is self-employed tuition teachers, LIC agents, etc.

Who are the taxpayers in India?
We can list down the entities that are entitled to pay taxes in India.

Individuals, Hindu Undivided Families, Body of Individuals, Corporate firms, Local Authorities, Companies, etc. are the major Income Taxpayers in our country.

All Income taxpayers in the country have to pay their taxes according to the tax slabs determined by the Income Tax Department.  Those taxpayers who are having an annual income of fewer than Rs.2.5 lakhs per annum are exempted from paying Income tax.

Income tax is subdivided into the following subheads:

(I) Advance tax:

The taxpayer estimates his annual in advance and thereby total tax liability. Tax is required to be paid in the financial year in which income is received and hence it is also called a “pay-as-you-earn” scheme.

In the case of salaried taxpayers, tax on salary is deducted and paid by the employer. So, the advance tax would be payable only if they have any other income besides salary and which is not reported to their employer. Further, Advance tax is mandatory only if the net tax liability for the financial year (after considering TDS and tax relief) is Rs. 10,000/- or more. There are some due dates for the payment of advance tax.

The due dates for payment of Advance Tax in case of individuals and companies are as follows:

Some important rules about Advance Tax:

1. If the tax liability in the previous financial year is less than Rs. 10,000/- then taxpayer need not pay advance tax in the current financial year. E.g. – Mr Ravi's total tax liability for the financial year 2021-22 is Rs. 8,650/-. Hence, Mr Ravi is not required to pay any advance tax instalment for the financial year 2021-22.
2. Advance tax is payable on capital gains. However one cannot estimate the exact capital gain advance so as to pay his advance tax instalment. Hence, if a taxpayer is having any capital gain after the due dates of the advance tax instalment, then such tax liability shall be paid in the remaining instalments.
3. The Assessee who is carrying business and opting for a presumptive taxation scheme has to pay its Advance Tax in one instalment by 15th March.

Who is exempted from paying Advance-tax?

Exemption for payment of Advance-tax is applicable to the following:

1. Senior Citizen who does not have any Income from Business.
2. Others have Tax Liability of less than Rs 10,000/- after considering TDS and Tax Relief on Income.

How do I pay this Advance-tax?

Advance Tax can be paid online also. To know how to pay Advance Tax online, click here

How do I show Advance tax details in my Income-tax return?

You can declare it while filing your Income-tax return in the Advance Tax section under Tax Paid option.

Estimate your Advance Tax liability by using our Advance Tax Estimator tool.

(II) TDS (Tax Deducted at Source):

When a taxpayer receives certain incomes viz. salary, commission, interest, rent, etc., some percentage of Income (say 10%) is kept aside as Income-tax by the payer. This kept aside amount is paid in the account of the Central Government. In short, the taxpayer receives the income after deduction of tax hence this tax is known as ‘Tax deducted at source.

Following are certain payments on which TDS deduction is required and its applicable rates:

(III) Self Assessment Tax:

Assessment, in simple terms, means estimation and calculation of Income and taxes thereon. The taxpayer is required to consider all the incomes viz. salary income, capital gains, business/professional income, interest, dividend etc. earned by him during the year. After that, all the eligible deductions shall be subtracted so that he will get taxable income. The taxes paid by the taxpayer earlier viz. advance tax, TDS (tax deducted at source) shall be deducted. And final tax payable is calculated as per the applicable rates. The taxpayer needs to pay this tax before filing his Income-tax return. All this is done by the taxpayer himself. Hence, this tax is known as Self-assessment Tax.

To know how to pay Self Assessment Tax online, click here 

(IV) Tax on regular assessment/scrutiny assessment:

Regular assessment is the same process as self-assessment. The only difference is in regular assessment, income and tax thereon are calculated by the Income-tax officer (Assessing Officer). Income-tax officer issues a notice to the taxpayer intimating that his case is selected for assessment. A taxpayer is required to provide all the documents asked for by the Assessing Officer. After considering all these, the officer finalizes the tax computation. If any tax is payable, the same is required to be paid by the taxpayer. Here, all the tax calculation process is done after regular or scrutiny assessment; hence this tax is called ‘Tax on regular assessment’.

How do I pay my Income-tax?

The Taxes can be paid by a taxpayer through any one of the following modes:

1. Through Bank (physical),
2. Online payment.
3. Paid Through Bank: The taxes due can be paid through specified branches of nationalized banks. A challan is required to be filed by the taxpayer specifying his PAN, name, Assessment Year and amount of tax to be paid. Bank will return the challan to the payer affixing its stamp as duly paid. The assessee is required to keep this challan as his personal record.

If a taxpayer wishes to pay taxes online, then he is required to follow the below-mentioned steps:

1. To pay taxes online, click on this link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp,
2. There are various types of challans like ITNS 280, ITNS 281, ITNS 282, ITNS 283, ITNS 284 or Form 26QB demand payment as applicable. In case of payment of Income-tax, ITNS 280 will be applicable.
3. Individual taxpayers are required to click on (0021- Income-tax – other than companies). Then enter PAN and other mandatory details like full name, address, contact No. etc.
4. There are various types of payments viz. advance tax, self-assessment tax, tax on regular assessment, the taxpayer is required to select the type of payment as applicable.
5. On confirmation of the data so entered, the taxpayer will be directed to the net-banking site of the bank.
6. The taxpayer has to log in to the net-banking site with the user id/password provided by the bank for net-banking purposes and enter payment details at the bank site.
7. On successful payment, a challan counterfoil will be generated containing the challan number, the amount paid, and the name of a bank branch through which e-payment has been made. This counterfoil is proof of payment being made.

Conclusion

Hence, with this brief analysis and study on the types of Income-tax, their payment methods, due dates and other facts; it has become quite easy for a taxpayer to have a crystal clear idea of the type of tax he needs to pay and the within what time frame the income tax payment needs to be completed. Awareness amongst taxpayers regarding the categories, calculations, and payment of tax is necessary to make them tax compliant.

FAQs

1. How can a taxpayer know that he has already paid advance tax?
   If a taxpayer has already paid the Advance tax then it will get reflected in the Form 26AS of the taxpayer within 2-3 days of making the payment.
   
   
2. Who is held responsible for failing to collect TDS or for the deposition of TDS with the Government?
   The deductor is to be held responsible for any failures related to TDS.