Tax
What is Tax?
Tax is a financial charge or other levy imposed on an individual or entity by a state or the functional equivalent of a state. It is usually imposed as a percentage of the value of a transaction, such as sales or income tax, or as a fixed amount per unit of measure, such as taxes paid on gasoline or cigarettes. Tax is typically based on an individual's ability to pay and may take into account different types of income (such as wages, dividends, capital gains) and assets (such as property).
Types of Taxation
Taxation can be broadly divided into two categories: direct and indirect taxes. Direct taxes are imposed directly on individuals and corporations in the form of personal income tax, corporate income tax, property tax, inheritance tax etc. Indirect taxes are generally levied on goods and services purchased by consumers; these include value-added tax (VAT), excise duty, customs duties etc.
Purpose of Taxation
The primary purpose of taxation is to raise revenue for governments in order to finance their activities; however taxation also has other economic effects such as shifting incentives to work and invest in certain areas. Depending on the country and its fiscal policies, citizens are subject to different levels of taxation depending upon their incomes. In addition to levying taxes directly from individuals or businesses, governments may also seek extra funding through borrowing money from international markets or issuing bonds and securities which are later repaid with interest through taxation.
How to pay income tax online?
paying income tax online is quite easy. All you need is an internet connection, bank account details, or an e-wallet account, along with some basic documentation like an Aadhaar card/ PAN card/ passport number, etc. Here are some steps that you can follow while paying income tax online:
- Log on to the official website of the Income Tax Department of India (www.incometaxindiaefiling.gov.in).
- Create your profile by entering your name, email address, Permanent Account Number (PAN), etc., and register yourself with the website. This will be your user ID and password for accessing your account in the future.
- Once registered, log into your profile with your user ID and password generated during registration—and you'll find a list of all the services available for the payment of taxes online.
- Select 'Income Tax Payment' tab from the menu bar on top and choose 'e-payment'. You’ll be asked to select either the ‘Net Banking’ or ‘Credit/Debit Card/' option from the Payment Gateway page displayed on the screen. Choose any one option according to your convenience;
- Enter all other required information including Assessment Year (AY), Type of Payment (TDS or Advance Tax), Major Head Code (usually referred as ‘Challan 280’), Bank Challan No., etc., in respective fields provided on payment gateway page as shown below:
- After providing all necessary information click on the 'Proceed' button present at the bottom right side of the page
- Review the payment details provided before clicking OK; make sure there're no mistakes before proceeding further
- On successful submission transaction reference number will be generated which can be used later for tracking status purposes; also note down this reference number safely somewhere else so that it doesn't get lost
- Now make payment using either net banking or credit/debit card depending upon chosen option earlier; note that some banks may take few minutes in completing authorization process even after successful submission
- Once money transfer is complete successfully transaction reference number will appear along with success message displayed on screen
