The introduction of online tax payment has been a paradigm shift for tax payers. It offers multiple benefits at one go, such as accuracy, faster processing, convenience and time saving. You can avoid long queues as well as pay the accurate amount of tax as per your convenience.
Indians mainly pay two types of taxes – direct tax and indirect tax. Two organisations are authorised to collect these taxes, the Central Board of Direct Taxes (CBDC) and Central Board of Excise and Custom (CBEC). E-payment option is available for both the cases. Online banking facility is a major need to get e-tax payment done.
What is direct tax?
Direct tax is generally levied on a person’s income and wealth and is paid directly to the government. Though income tax is the most common form of direct tax, a number of tax components fall under this category.
Direct tax payment includes: Tax deducted at Source (TDS), Income Tax, Tax Collected at Source (TCS), corporation tax, dividend distribution tax, transaction tax, security hotel receipts tax, estate duty, interest tax, wealth tax, expenditure tax / other direct taxes and gift tax, fringe benefits tax and banking cash transaction tax.
What is indirect tax?
Indirect Tax is generally charged on goods and services that a person consumes and is paid indirectly to the government.
Indirect tax includes: sales tax, Value Added Tax (VAT), excise duty, custom duty, Securities Transaction Tax (STT) and service tax.
As the name suggests, the burden of direct tax cannot be shifted. The tax payers themselves have to file a Tax Return.
As the other taxes are paid indirectly, the burden of indirect tax can be easily shifted to another person. That is why, indirect tax gets paid unknowingly. For instance, sales tax is an included component in the MRP of all products. The tax gets paid at the point of purchase. Common people don’t need to file a return for it.
Customs duty is paid only if the goods are exported or imported. The manufacturer pays it on behalf of the consumers. So, indirect tax e-filing is done only for excise duty and service tax.
Mandated limit for e-filing
Paying applicable tax is a legal obligation. To avoid corruption and fudging of accounts, the government has made e-tax payment mandatory. For direct tax, if the taxable income is above Rs. 5 lakh, then the taxpayer has to opt for filing tax online. For indirect tax, if the excise duty and service tax liability is above Rs. 10 lakh, then it is mandatory to pay it electronically.
Procedure of tax payment
While Direct Tax is mainly about filing tax return, indirect tax is only about paying money.
To file Income Tax Return, assessees have to login to the Income Tax website.
Different kinds of Income Tax return forms are available. The taxpayer has to download ITR Java or Excel Utility, whichever is applicable to the payer. After filling the form, you should cross-check the figures with Form 16, Form 16A and Form 26AS. The form can be directly uploaded or the XML file can be filled with details and uploaded.
After successfully uploading your return, you will receive acknowledgement details. If there is no digital signature, the ITR V form will be generated. That form has to be signed and sent to the Income Tax department to complete the process. If anything else needs to be paid, the payment can be made in banks with corresponding Challans.
In case of indirect tax payment, the assessee has to visit www.aces.gov.in. To pay service tax or excise duty, a 15-digit assessee code, allotted by the jurisdictional commissionerate, has to be entered. The code will be checked online. Once it is found valid, other details such as commissionerate code, name and address will appear in the screen. The taxpayer is required to select service tax or excise duty depending on the type of duty they are paying. Then the bank name, through which the payment will be processed, has to be selected. After submission, the confirmation will be displayed on the screen.
Once the taxpayer confirms the information furnished by him, it would by channelised to the dedicated bank’s website for deduction. Tax payment can be made through net banking. After successful payment, a challan counterfoil will be displayed on the screen. The display will contain payment details and CIN and bank name.