The income you earn is taxed in three ways, namely,

  1. a) Tax deducted at source (TDS),
  2. b) Advance tax payments, and
  3. c) Self- assessment taxes paid before filing your income tax return (ITR).
  4. Tax deducted at source (TDS):

Salary received by employees is subject to TDS, in that case, they are not mandatorily required to pay advance tax on salary income.

  1. Advance tax payments:

An individual whose total tax liability exceeds Rs 10,000 in a financial year is liable to pay advance tax.
If you have income from other sources such as interest income or capital gains that are taxable which are not reported to your employer, then you are liable to pay advance tax on such sources of income.

  1. Self- assessment taxes paid before filing your income tax return (ITR):

Apart from advance tax, before you start filing your ITR, you are required to calculate your total tax liability on the income earned during the previous financial year and deposit any balance tax payable as self-assessment tax.

Online method of payment of taxes:


Step1: You can log on to the official website of Income tax department i.e.:

Step2: After signing-in an option, click on “e-Pay taxes”. Click on “Continue as NSDL website”.


Step 3: After this, you will be directed to NSDL


Step 4: Selection of the appropriate challan

 Challan No 280: Payment of Advance tax, Self-Assessment tax, Tax on Regular Assessment, Surtax, Tax on Distributed Profits of Domestic Company and Tax on Distributed income to unit holders.

Challan No 281: You can select challan no /ITNS 280 followed by (0021) Income tax (other than companies).

Select –

  1. Whether it is a corporate tax or Income Tax (Other than company)
  2. Type of payment
  3. Enter PAN

Step 5:  You will need to fill in details such as PAN card, name, residential address, email address and mobile number. Select the appropriate year for assessment that you will be making the payment for.

Step 6: Once you click on ‘Proceed’, a new page will appear on your screen. Here also you are required to confirm that the information mentioned is correct. Click on ‘Submit to the bank’ button.

Step 7: You will be redirected to the website of your bank. Here you will be required to log-in to net banking or enter your debit card details as applicable, and enter the tax to be paid by you.


Step 8: Once the payment is made by you, a receipt will be generated. This receipt should contain details such as the amount of taxes paid by you, BSR Code, Challan serial number, date of challan etc. These details will be required at the time of filing your ITR.