UNIT-I

Tax Planning

Q1) What is tax planning? Discuss the steps involved in tax planning?   8

A1) Tax planning is the process of analysing a financial plan or situation from a tax perspective. The purpose of tax planning is to ensure tax efficiency. With the help of tax planning, you can ensure that all elements of your financial planning work with maximum tax efficiency. Tax planning is an important element of financial planning. Reducing tax obligations and increasing your ability to contribute to retirement plans are key to success. Tax planning includes a variety of considerations. Considerations such as size, income timing, purchase timing, and planning relate to other types of spending. Also, the investment chosen and the various retirement plans must be closely related to tax filing status and deductions in order to produce the best possible results.

The steps in the Tax Planning process are as follows:

1. Take your total income into account first. This is just the starting point of the process and you need to calculate your annual and monthly income honestly and accurately.
2. Please check the taxable amount accurately. The entire takeaway payment is not taxable. Some salaries, such as rent and travel allowances, are not taxable. On the other hand, the return on investment may be added to taxable income. Therefore, you need to understand the actual taxable income.
3. Take advantage of deductions to reduce your total taxable income. This can be achieved by configuring salaries and planning your investment correctly. For example, profits from debt funds held for more than 3 years are taxed at 20% after indexing. On the other hand, interest from fixed deposits is taxed at the same rate as income tax. Therefore, a debt fund may be a tax-friendly option if it falls within the 30% range.

4. Finally, invest some money in tax-saving measures. To do this, you need to read Section 80 of the Income Tax Act. It refers to all tax-related rules. There are many investment options available for effective tax planning, including Provident Public Funding (PPF), Equity Link Savings Scheme (ELSS), and National Savings Certificate (NSC). Even your life insurance, health insurance and mortgage payments can help you take advantage of tax savings.

5. All you need is a quick understanding of your income and some basic tax laws. This little effort can greatly help secure your overall finances security. Unfortunately, given the hustle and bustle of everyday life, there is not enough time to find time to do this. But now that we know how important it is, we hope you find the time.

Q2) Discuss about different provisions that facilitates tax planning of an individual?                                      5

A2) Taxpayers have several options to reduce their tax obligations. Various sections of India's Income Tax Act provide tax credits and tax exemptions, of which Section 80C is the most popular tax-saving measure. For example, publicly funded deposits, five-year bank depositors, national savings certificates, and investments in ELSS schemes.

The best and best way to save taxes is to make a financial plan and stick to it whenever there is a change in your income. It's also a good practice to make a tax-saving investment at the beginning of the year, rather than rushing to the last moment and often making the wrong investment decision. To do this, it is important to note all available tax exemptions and deductions.

Tax-saving options based on Section 80C

Section 80C, one of the most prevalent sections of the 1961 Income Tax Act, saves up to 46,800 rupees each year (assuming a maximum income tax of @ 30% and an educational tax of 4%). It stipulates regulations. One of the best tax-saving measures under Section 80C is to invest in a stock-linked savings scheme, more commonly known as ELSS. Such tax planning mutual funds offer the dual benefits of potential capital appreciation and tax savings. Apart from the ELSS fund, you can choose to invest in government schemes such as National Savings Certificate (NSC), Public Provident Fund (PPF) and Tax Saving FD. Cumulative investments based on these securities can offer deductions of up to Rs 15,000.

Tax-saving options based on Section 80D

In this section, taxpayers will be provided with a deduction for premiums paid for their health insurance policy. Under Section 80D, taxpayers can claim the following amounts as deductions:

1. Up to Rs 25,000 is available for self, child or spouse health insurance
2. Up to Rs50,000 is available if your parents are also covered by your health insurance plan
3. A maximum deduction of Rs75,000 is allowed if either of your parents belongs to the Elderly Bracket

Tax-saving options based on Section 80E

Section 80E provides tax credits on interest paid on mortgages. These deductions can be claimed for 8 years from the date of repayment. There is no upper limit to the deduction amount. This means that the assessed person can claim the full amount paid as interest from taxable income.

HRA Tax Exemption Application

Under the HRA, taxpayers can take advantage of tax exemptions on the costs of staying in rental housing. Taxpayers are required to submit a receipt for the rent provided by the landlord. The available deduction amount is the smallest of the following amounts.

1. The HRA you actually received. Or
2. Basic salary of taxpayers living in big cities + 50% of DA (Dear Allowance). & 40% of taxpayers (basic salary + DA) residing in non-major cities. Or
3. The total rent paid is 10% of the basic salary + DA minus

Other Tax Exemptions and Deductions

Apart from the above deductions and exemptions, you can save taxes in several different ways. Donations to charities and qualified organizations are also tax exempt.

Under the new tax system announced at Union Budget 2020, individuals can choose to pay taxes at discounted rates and redefine their income tax slabs by waiving various deductions and tax exemptions.

Income tax planning is a perfectly legal and wise decision if implemented under the framework defined by the respective authorities. However, you may be confused about adopting dubious techniques to save taxes. It is the duty and responsibility of all citizens to carry out a prudent tax plan. Based on your tax slab, personal choice, and social responsibility, you can choose from the separate tax-saving mutual funds and investment methods offered to you.

Q3) What is tax plan? What is the purpose for tax planning?               5

A3) A tax plan is a logical analysis of income and expenses that help you make the best investment so that you can save money when paying taxes. Very simply, this process allows you to think about tax payments at the beginning of the year instead of holding for 11 hours. Therefore, the purpose of tax planning is to manage money in a way that reduces the amount you pay as taxes.

Purpose of Tax Planning

1. Minimal Proceedings: There is always friction between tax collectors and taxpayers. In these situations, it is important to comply with tax payments and use them properly to minimize friction.
2. Productivity: One of the most important purposes of tax planning is to channel taxable income into different investment plans.
3. Reducing Tax Obligations: Taxpayers can save up to their tax payments by using the appropriate arrangements to do business in accordance with the required laws.
4. Healthy Economic Growth: Economic growth depends heavily on the growth of its citizens. The tax plan estimates the generation of free-flowing white money.
5. Economic Stability: Stability is complemented when the tax plan behind the business is in place.

Q4) What is tax evasion? Discuss the methods used for evading tax by the taxpayers.         8

A4) Tax evasion is an illegal act in which an individual or company avoids paying tax obligations. It evokes hidden or false income without evidence of inflating deductions or reporting cash transactions. Tax evasion is a serious crime and imposes criminal liability and considerable penalties.

The  methods used for tax evasion are-

1. Do not pay due date

This is the easiest way for someone to evade taxes. Even when a membership fee is requested, they will simply not pay it to the government. Persons engaged in this type of tax evasion do not voluntarily or involuntarily pay taxes before or after the due date.

2.     Smuggling:

If a particular item moves from one location across the border to another, you may be charged taxes or fees to move the item. However, some individuals may secretly move these items to avoid paying taxes that completely avoid tax evasion.

3.     Submission of false tax returns

In some cases, when an individual files a tax return, he or she may provide false or incorrect information in order to reduce or not pay the tax that he or she is supposed to pay. This is also tax evasion, as you may not have been provided with complete information and you may have paid less than you actually should have paid.

4.     Inaccurate financial statements

Taxes paid by an individual or organization may be based on financial transactions conducted during the valuation year. Submitting false financial statements or books that earn less than you actually earn can reduce your taxes.

5.     Claim tax exemption using forged documents

Government may have provided certain exemptions and privileges to ensure a little more financial freedom for certain demographics or members of society to progress. In some cases, members who are not actually entitled to such privileges obtain a document created to support their claim that they are part of that group and are therefore exempt if they are not suitable. Insist.

6.     Do not Report Income

This is one of the most common methods of tax evasion. In this case, the individual does not report the income received during the fiscal year. They haven't paid taxes because they haven't reported their income, so they've succeeded in tax evasion together. The simplest example of this is a landlord who keeps a renter but does not notify the authorities that he is renting a house and actually earning income.

7.     Bribery

There may be a certain amount of tax that an individual is not willing to pay. In such cases, he or she may actually bribe the civil servant to prevent them from paying taxes and "disappear" it.

8.     Accumulate Wealth Abroad

We have all heard of Swiss bank accounts. Offshore accounts are foreign-managed accounts and information about transactions in these accounts is not disclosed to the Income Tax Office, thus avoiding all taxes levied on their assets.

Q5) Write a brief note on tax evasion.        12

A5) Tax evasion is an illegal act in which an individual or company avoids paying tax obligations. It evokes hidden or false income without evidence of inflating deductions or reporting cash transactions. Tax evasion is a serious crime and imposes criminal liability and considerable penalties.

Supporting taxes is by no means easy, as most people question the concept of donating a portion of their income to the government, but in reality taxes are an important source of income for the government. This is the money invested in various development projects aimed at improving the situation of the company. However, the country faces the big problem of tax evasion. Those who should pay taxes find a way to not pay taxes, and as a result, the country's income is suffering. Now let's look at how people avoid taxes and the penalties for them.

Common methods of Tax Evasion

There are two aspects to not paying taxes when the tax is due. One is tax avoidance and other tax evasion. The difference between the two is that tax avoidance basically finds loopholes that exempt tax payments and is not strictly illegal, but avoidance does not pay taxes at the time of actual tax payment and is absolutely illegal. These are some of the ways people avoid / avoid taxes.

1. Do not pay due date

This is the easiest way for someone to evade taxes. Even when a membership fee is requested, they will simply not pay it to the government. Persons engaged in this type of tax evasion do not voluntarily or involuntarily pay taxes before or after the due date.

2.     Smuggling:

If a particular item moves from one location across the border to another, you may be charged taxes or fees to move the item. However, some individuals may secretly move these items to avoid paying taxes that completely avoid tax evasion.

3.     Submission of false tax returns

In some cases, when an individual files a tax return, he or she may provide false or incorrect information in order to reduce or not pay the tax that he or she is supposed to pay. This is also tax evasion, as you may not have been provided with complete information and you may have paid less than you actually should have paid.

4.     Inaccurate financial statements

Taxes paid by an individual or organization may be based on financial transactions conducted during the valuation year. Submitting false financial statements or books that earn less than you actually earn can reduce your taxes.

5.     Claim tax exemption using forged documents

Government may have provided certain exemptions and privileges to ensure a little more financial freedom for certain demographics or members of society to progress. In some cases, members who are not actually entitled to such privileges obtain a document created to support their claim that they are part of that group and are therefore exempt if they are not suitable. Insist.

6.     Do not Report Income

This is one of the most common methods of tax evasion. In this case, the individual does not report the income received during the fiscal year. They haven't paid taxes because they haven't reported their income, so they've succeeded in tax evasion together. The simplest example of this is a landlord who keeps a renter but does not notify the authorities that he is renting a house and actually earning income.

7.     Bribery

There may be a certain amount of tax that an individual is not willing to pay. In such cases, he or she may actually bribe the civil servant to prevent them from paying taxes and "disappear" it.

8.     Accumulate Wealth Abroad

We have all heard of Swiss bank accounts. Offshore accounts are foreign-managed accounts and information about transactions in these accounts is not disclosed to the Income Tax Office, thus avoiding all taxes levied on their assets.

Penalties for Tax Evasion

There are various penalties that the Income Tax Department can impose on a person convicted of tax evasion or avoidance. These penalties may also apply to companies that fail to self-report and pay taxes, or to companies that fail to withhold when they are scheduled to withhold.

Some of these are:

1. If your income is not disclosed, we will collect 100% to 300% of the tax.
2. If you fail to pay the tax, the assessor can impose a penalty, but you cannot exceed the tax amount.
3. Rupees penalty if an individual does not file a tax return within the allotted time. If you do not submit a statement, you may be charged 200 per day.
4. If someone hides their income details or the taxable fringe benefits, the penalty will range from 100% to 300% of the tax paid.
5. If an individual or company fails to properly maintain an account as directed in Section 44AA, an Rs penalty will be imposed. 25,000 may be collected.
6. If a company fails to audit itself or provide an audit report, it will be penalized for Rs. You may be charged 15,000 rupees or 0.5% of sales, whichever is less.
7. If the accountant's report is not provided as instructed, you will be fined Rs. 10,000 rupees may be collected.
8. If the tax cannot be deducted where the organization is supposed to make the payment, the penalty may be an unpaid tax payment.
9. These are just a few of the penalties that the Income Tax Department can impose, and in some cases large payments may be required, so it is best to ensure that all taxes are paid by the due date is.

Q6) What is tax avoidance? What are the reasons and effects of tax avoidance? 5

A6) Tax avoidance refers to the use of legal means to avoid tax payments. This is primarily dependent on the tax laws of a particular country and the various provisions of that country’s tax law. In such cases, taxpayers can exploit the shortcomings of tax law to find new ways to avoid paying taxes that are within the scope of the law. Most taxpayers avoid taxes by adjusting their books within the legal provisions of the law.

Reasons for tax avoidance

1. The idea of   taxpayers who force them to abuse the provisions of tax law.
2. Despite their low income, they are always thinking of being charged higher taxes.
3. Significant reduction in tax payments.

Effect of Tax Avoidance

1. Avoiding taxes has multiple implications. Below are some important effects.
2. This leads to lower public revenues, which in turn affects the growth of the country.
3. Black money accumulated by tax avoidance has a significant impact and can lead to unnecessary inflation.
4. Honest taxpayers begin to have a sense of inequality compared to those who avoid taxes and face no consequences.
5. Delays in government projects due to spending restrictions.

Q7) Write a brief note on corporate tax in India.                                        8

A7) A company is an organization that has an independent legal entity separate from its shareholders. Domestic and foreign companies are obliged to pay corporate tax under the Income Tax Act. Domestic companies are taxed on basic income, while foreign companies are taxed only on income earned in India. That is, it occurs or is received in India. In the calculation of the tax amount based on the Income Tax Act, the type of company can be defined as follows-

• Domestic companies: Domestic companies are companies registered under the Companies Act of India, including companies registered abroad and management is entirely in India. Domestic companies include private companies as well as public companies.
• Foreign Companies: Foreign companies are companies that are not registered under the Companies Act of India and are managed and managed outside India.

What does company income mean?

Before we can understand the tax rate and how to calculate taxes on a company's income, we need to learn about the types of income a company earns.

It's here:

1. Profit from business
2. Capital gain
3. Income from rental properties
4. Income from other sources such as dividends and interest.

Applicable Tax Rate

Income Tax: The following tax rates will be applied to domestic companies in 2020-21 based on sales

In addition, additional charges levied if the company is taxed under Section 115BA. If the total income exceeds 1 rupee and up to 10 rupees, the additional charge is 7%. If the total income exceeds 1 billion rupees, the additional charge is 12%. However, if the company chooses to tax under Section 115BAA or Section 115BAB, the surcharge will be 10% regardless of total income.

The following rates apply to foreign companies in 2020-21 based on turnover rates.

In addition to above rates:

Surcharge rate:

Filing Income Tax Returns

Deadline for filing income tax returns Companies, including foreign companies, are required to file income tax returns by October 30 every year. Even if the company is established in the same fiscal year, you must file an income tax return for that period before October 31st. In 2019-2020 (2020-21), the due date has been extended to November 30, 2020 due to the pandemic.

Tax returns filed by company ITR6:

All companies, except those claiming deductions under Section 11, are required to file a tax return using form ITR6. Submit your tax return using Form ITR7. Tax Inspection Income Tax Act requires a class of companies to audit their accounts and submit an audit report to the IT department along with their income tax returns. This audit is known as a tax audit. This tax audit report must be compulsorily submitted by a qualified company by September 30th. However, the deadline for submitting the tax audit report for 2019-20 (2020-21) is October 31, 2020. Corporate tax is a sea of regulations that every company must comply with.

Q8) How corporate tax is calculated in India?                  5

A8) Corporate tax is calculated based on the company's net income or net income. The company's net profit / income is the total amount left in the company after various costs have been deducted as needed. There are many costs that a company incurs to sell a product. These costs are as follows:

1. Depreciation.
2. Total cost of sales.
3. Selling costs.
4. Expenses incurred for administrative purposes.
5. Company income includes net income from the business, rent income, capital gains, or income from other sources of income such as interest or dividend income.

Thus, Net Revenue = Gross Revenue – (Expenses + Depreciation) 

Indian corporate tax rate on domestic corporations

A domestic company / company is a company that originated in India and is completely managed in India.

The applicable tax rate of corporate tax for 2019-20 for the following domestic companies:

1. A domestic business entity with sales up to Rs. We will pay a fixed amount of 250 chlores and 25% corporate tax.
2. When the total income earned by the company exceeds Rs in a particular fiscal year. For 100 million rupees, such corporations are subject to an additional corporate tax of 5%.
3. Domestic companies are also charged a 4% health education fee.
4. If a particular domestic company has a branch office abroad, the same amount of corporate tax is levied on the company's total global revenue. Corporate tax for Indian domestic companies also takes into account the income earned by foreign domestic companies.

Q9) Write notes on-                                                          8

a)     Corporate tax

b)    Company

c)     Indian company

d)    Foreign company

A9) Corporate tax

Corporate tax refers to the taxation of businesses (as defined by the Income Tax Act of 1961) and is the government's primary source of income. Under the Income Tax Act of 1961, businesses are obliged to pay a fixed amount of tax on their income (similar to partnership companies) without the basic tax exemption restrictions that apply to individuals or FIUF. The tax collected from a company (as defined by the Income Tax Act of 1961) is called "corporate tax" or "corporate tax". It is interesting to note that corporate tax revenues are held by the central government and are not shared with the state government.

Company

According to Section 2 (17), a company means:

1. An Indian company, or a legal entity established by law in a country other than India, or
2. An institution, association, or entity that was evaluated as a company in the valuation year under the Income Tax Act of 1922, or as a company in the valuation year beginning before 1.4.1970.

An institution, association, or entity declared to be a company by CBDT general or special order, whether legal or non-Indian or non-Indian.

Indian Company [Section 2 (26)]:

"Indian Company" means a company established and registered under the Companies Act of 1956, including:

1. A company established and registered under the law relating to a company previously in force in any region of India (excluding Jammu and Kashmir and Union Territory).
2. A legal entity established by or under central law, state law, or state law.
3. An institution, association, or body declared to be a company by the board of directors.
4. In the case of Jammu and Kashmir, for the time being, the company was established and registered under the laws in force in that state.
5. In the case of the Union Territory of Dadra and Nagar Haveli, Goa, Daman and Diu, or Pondicherry, the company was established and registered by law for the time being under that Union Territory.
6. Provided that the headquarters of a registered or possibly company, company, institution, association or organization is in India in all cases.

Domestic companies [Section 2 (22A)]:

Domestic company means an Indian company or other company that has made certain arrangements for filing and paying dividends (including preferred stock dividends) in India with respect to income taxed under the Income Tax Act) Paid from such income. Therefore, all Indian companies are treated as domestic companies, but not all domestic companies are Indian companies. If a foreign company makes a prescribed arrangement for the payment of dividends in India, it shall be treated as a domestic company.

Foreign companies [Section 2 (23A)]:

A foreign company is a company that is not a domestic company, that is, a company that is registered in another foreign country outside India. Foreign companies may be treated as domestic companies if they make certain arrangements in India in accordance with Rule 27.

Rule 27: Arrangement of provisions for the declaration and payment of dividends in India.

1. The arrangements mentioned in Sections 194 and 236 by the Company for the declaration and payment of dividends (including preferred stock dividends) within India are as follows:
2. The registration of shares of the company for all shareholders shall be maintained on a regular basis at major offices in India for the valuation year from the date of April 1 of that year.
3. The General Assembly for passing and declaring dividends for previous years related to the valuation year shall be held only in locations within India. Declared dividends, if any, shall be paid to all shareholders only within India.

Q10) Write a brief note on residential status of a company.                 8

A10) The status of residence of a person is handled under the Income Tax Act of 1961, the Foreign Exchange Management Agency (FEMA) of 1999, the Companies Act of 1956, and the Direct Tax Bill of 2009.

Company Status of Residence [Section 6 (3)]

The determination of a company's total income depends on the relevant previous year's status of residence. The status of residence of the company is determined by either

1. Based on its establishment (registration); or
2. Based on the control and management of that business.

Companies can be divided into two categories based on their status of residence.

1. Residential company
2. Non-resident company.

(A) Resident company [Section 6 (3)]

The company is said to have lived in India the previous year

1. It's an Indian company;
2. During the relevant previous year, the management and management of its operations is entirely in India.

Observation

1. An Indian company is always a resident company for income tax purposes, even if the management and management of its operations is saturated outside India.
2. A non-Indian or foreign company will be treated as a resident of India in the previous year only if all control and control of the business of such company during the relevant previous year is in India.

For example:

1. The company is founded in India but is headquartered in Dhaka.
2. The company is founded in Bangladesh but is headquartered in Kolkata

First, it is incorporated in India and the situation at the headquarters is not important, it is a resident company. In the second case, it is incorporated outside India, but its management and control is entirely in India, so it is a resident company.

(B) Non-resident company [Section 2 (30)]

The company will be non-resident in the previous year if:

1. It's not an Indian company
2. The place of effective management for the year is not India.

This means that foreign companies whose controls and controls are wholly or partially outside India become non-residents. For example, an American company holds eight meetings in India out of a total of 12 meetings held the previous year. Such companies will be non-resident for the purpose of such previous year's income tax. Schedule XIII of the Companies Act of 1961 addresses the conditions that must be met in order to appoint a full-time or full-time director or manager (called a "manager") of a company without the approval of the central government. The description in clause (e) of Part I of the schedule stipulates that resident of India include those who have been in India for at least 12 consecutive months immediately prior to the date of appointment as administrator. I am. I came to stay in India to get a job in India or to carry out a business or profession in India.

Comparison of status of residence under the Income Tax Act, FEMA and Companies Act

An individual may be considered a resident under the Income Tax Act and a non-resident under the FEMA, as the criteria for determining an individual's status of residence differ between FEMA and Income Tax Act.

Under the Income Tax Act, an individual's status of residence is determined for a particular year and is relevant to determine the taxability of the income earned in that year. Under FEMA, status of residence is not only determined at a particular point in time, but is an on-going process that pertains to the determination of whether an individual can make a particular transaction at that particular point in time. People who are considered non-resident under the Income Tax Act of 1961 are also considered non-resident for the purposes of FEMA application, but not necessarily those who are considered non-resident under the FEMA. For example, a resident Indian will go abroad to do business in December 2008. Under the Income Tax Act, you will be considered a resident during the 2008-09 fiscal year as you will stay in India for more than 182 days. However, under FEMA, he is considered a non-resident the moment he leaves the country for business purposes. Under the Companies Act of 1956, residents of India include those who have been in India for more than 12 months immediately prior to taking office. Therefore, a person who stays in India for employment, business or profession may not be eligible to be appointed as the manager of the company until then without the approval of the central government.

Q11) What is tax? What are the different types of tax?                8

A11) Tax obligations are the full amount of unpaid taxes within the relevant period and are paid to taxable entities such as the central and state governments, or to local governments such as local governments. Individuals and institutions are obliged to pay taxes on their working income.

Tax Type

India's current tax system has two main tax categories. And these two categories are further subdivided. Here is the type-

Direct Tax

The tax obligation paid directly to the central government is direct tax. Individuals and organizations with taxable income are entitled to pay for it.

Direct Tax Subdivision

1. Income Tax

With the exception of businesses, individuals or HUFs are obliged to pay taxes on their income during the fiscal year. The government imposes income tax on salaries, pensions, interest income, and real estate rental income. In addition, the income of freelancers, self-employed or contractors, CAs, lawyers and doctors is also subject to income tax.

2.     Corporate Tax

Domestic and foreign companies must liquidate their income tax obligations on gross profits during the period. However, domestic companies pay taxes on basic income and foreign companies are only taxed on Indian income. Corporate tax has the following subcategories-

1. Access to Health and Education – In addition, an additional 4% of income tax goes to health and education.
2. Dividend Distribution Tax-Companies are obliged to pay dividends circulated among shareholders in each fiscal year and are exempt from tax up to Rs. The Income Tax Act allows 100,000 rupees. This tax is levied on the total or net income of a company's investment.
3. Minimum Substitution Tax – Minimum Change Tax is a mandatory tax payable at a rate of 18.45% of book profit under Section 115 JA only if the affiliate is paying income tax below the above rate.
4. Fringe Benefit Tax – Fringe Benefit Tax is included in benefits such as accommodation, travel allowances, and employee contributions to the retirement fund.

All of these taxes are subject to Indian corporate tax.

3.     Securities Transaction Tax

The Government of India imposes income tax on stock markets and securities transactions on the Indian Stock Exchange.

4.     Capital Gains Tax

Capital gains tax is levied on both the return on investment and the profit from the sale of real estate.

5.     Prerequisite Tax

Prerequisite taxes are counted on several facilities that the organization provides to its employees.

Indirect Tax

Here, individuals do not pay taxes directly to the government. Instead, taxes are bundled with the price of the product or service. Currently, the only indirect tax in India is the GST or Goods and Services Tax.

Q12) Discuss the payment procedure of tax.                                5

A12) In India, you can pay taxes both online and offline.

Online Payment Method

Step-

1. First, go to the approved website (www.tin-nsdl.com) and log in. Click the Services tab, then click Electronic Payments.
2. A screen containing electronic payment of taxes will be displayed. Individuals should choose challan – ITNS280.
3. Then enter the required details for this Sharan, along with PAN or TAN.
4. After submitting the details with a valid PAN or TAN, the confirmation screen will display the individual's name.
5. Posting this confirmation will redirect the taxpayer to the bank's online banking page.
6. Then go to the online banking site and enter your payment details.
7. If the payment is successful, Sharan's counterpart will be displayed as proof of payment. This completes the tax payment process.

Offline Mode

Individuals can download challan 280 from the internet or collect from banks. They can settle their tax obligations in cash or by cheque.