Income Tax Payment

  • Blog|Income Tax|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 11 January, 2021
Filing of Return of Income Tax is a yearly process. Every person having income more than maximum income not chargeable to tax is required to file ITR in specified forms on or before due date every year. However, the Income Tax Department collects tax throughout the year by way of TDS and advance tax. Having regard to this mechanism of tax payment and return filing, there are chances that either tax deposited falls short or is paid in excess than the actual tax liability computed as per the slab rates of income tax at the end of the year. 

When tax is short paid:

The deficiency in tax has to be paid to the department through Challan No. 280 under self assessment tax along with the interest as per the provisions of Section 234B and 234C of Income Tax Act. If the assessee’s estimated tax liability at the beginning of the year is Rs. 10,000/- or more for the financial year, then advance tax has to be paid. In case the person fails to make payment of advance tax, the department charges interest under section 234C at the rate of 1% per month for 3 months period on the default amount in each installment but for last installment interest is charged for one month. Also, an interest under section 234B is charged at the rate of 1% per month (or part of a month) up to the actual date of payment of tax liability if payment of advance tax is less than 90% of advance tax liability.

When tax is paid in excess:

While working out the tax liability for the particular financial year, if the assessee finds that tax already paid by way of advance tax or TDS happens to be more than the actual liability, then he can claim refund with respect to the excess amount of tax deposited with the government. Refund can be claimed only by filing the return of income. Once the return of income is filed, it is processed by the department of income tax and intimation under section 143(1) is sent to the registered email address of taxpayer. Along with the intimation the refund is released by the Dept.

How to check Income Tax refund status?

Refund status can be checked: 1. By logging into Income Tax e-filing website 2. On TIN NSDL website by using PAN

How is refund processed?

Department of income tax processes refund through the State Bank of India (SBI) by way of direct credit to the account as provided while filing Income tax return via RTGS/NEFT or by issuing a cheque and sending it to the taxpayer’s registered address. 

Author Bio: Radhika Daga is a CA Final student. Connect with her on Linkedin

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