May 2023

Introduction Income tax payment is a vital component of every taxpayer’s life. Whether you are a salaried employee or a business owner, you need to pay your taxes on time to avoid any penalties or legal complications. One of the most popular methods for making income tax payment is using Challan 280. Challan 280 is a form that taxpayers can use to pay their income tax dues. In this blog, we will cover everything you need to know about Challan 280, including its procedure, verification of payment, correction of details, and more. What is Challan 280? Challan 280 is a form used for income tax payment. It is used by taxpayers who are not required to pay their taxes through TDS (Tax Deducted at Source). It is used to pay taxes such as advance tax, self-assessment tax, or regular assessment tax. Procedure for Making Income Tax Payment using Challan 280 The procedure for making income tax payment using Challan 280 is straightforward. Here are the steps you need to follow: Download Challan 280: You can download Challan 280 from the official website of the Income Tax Department or NSDL. You need to select the appropriate assessment year, type of payment, and mode of payment. Once you have filled in the required details, you can download the Challan 280 form in PDF format. Fill in the Details: The next step is to fill in the details required in the Challan 280 form. You need to fill in your name, address, PAN, and assessment year. You also need to mention the type of payment you are making, such as advance tax, self-assessment tax, or regular assessment tax. Calculate Tax Amount: After filling in the required details, you need to calculate the tax amount that you need to pay. You can use the tax calculator available on the Income Tax Department’s website to calculate the tax amount. Make the Payment: Once you have filled in all the required details and calculated the tax amount, you can make the payment. You can make the payment using any of the available modes such as net banking, debit card, credit card, or through a bank. Proof of Payment of Tax: After making the payment, you need to keep a copy of the Challan 280 form as proof of payment of tax. Verification of Challan Tax Payment Once you have made the payment using Challan 280, you need to verify the payment to ensure that it has been credited to your account. Here are the steps you need to follow to verify the payment: Visit the NSDL website: You need to visit the NSDL website and select the “Challan Status Inquiry” option. Enter the Required Details: You need to enter the required details such as your Challan Identification Number (CIN), your PAN, and the assessment year. Verify the Payment: After entering the required details, you can verify the payment status. If the payment has been credited to your account, you will see the payment details such as the amount, date of payment, and mode of payment. Correction of Details If you have made a mistake while filling in the details of Challan 280, you can correct it. Here are the steps you need to follow to correct the details: Visit the NSDL website: You need to visit the NSDL website and select the “Online Correction” option. Enter the Required Details Fill in the Correct Details: After entering the required details, you need to fill in the correct details. You can make corrections in the name, address, PAN, or any other details as required. Submit the Correction: Once you have filled in the correct details, you can submit the correction. After submission, you will receive a confirmation message on your registered mobile number and email address. FAQs Q. Can I use Challan 280 for all types of tax payments? A. No, Challan 280 can be used only for income tax payments such as advance tax, self-assessment tax, or regular assessment tax. Q. Can I make an online payment using Challan 280? A. Yes, you can make an online payment using Challan 280. You can use any of the available modes such as net banking, debit card, credit card, or through a bank. Q. How can I verify my tax payment using Challan 280? A. You can verify your tax payment using Challan 280 by visiting the NSDL website and selecting the “Challan Status Inquiry” option. Enter the required details such as your Challan Identification Number (CIN), your PAN, and the assessment year to verify the payment. Q. Can I correct the details of Challan 280 after making the payment? A. Yes, you can correct the details of Challan 280 after making the payment. You need to visit the NSDL website and select the “Online Correction” option. Enter the required details and fill in the correct details to submit the correction. Conclusion Challan 280 is a popular form used for income tax payment by taxpayers who are not required to pay their taxes through TDS. The procedure for making income tax payment using Challan 280 is straightforward, and you can make the payment using any of the available modes such as net banking, debit card, credit card, or through a bank. After making the payment, you need to keep a copy of the Challan 280 form as proof of payment of tax. You can verify the payment using the NSDL website and correct the details if required. By following the steps mentioned in this blog, you can easily make yo

Amount of investments, etc., not fully disclosed in books of account Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.

Unexplained money, etc Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.

Unexplained investments Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.

Cash credits Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: 35[Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,—  (a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and  (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that] where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—  (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and  (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: 36[Provided also] that nothing contained in the first proviso 37[or second proviso] shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.

Method of computing a member’s share in income of association of persons or body of individuals (1) In computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known [other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], whether the net result of the computation of the total income of such association or body is a profit or a loss, his share (whether a net profit or net loss) shall be computed as follows, namely :—  (a) any interest, salary, bonus, commission or remuneration by whatever name called, paid to any member in respect of the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body;  (b) where the amount apportioned to a member under clause (a) is a profit, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member’s share in the income of the association or body;  (c) where the amount apportioned to a member under clause (a) is a loss, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member’s share in the income of the association or body. (2) The share of a member in the income or loss of the association or body, as computed under sub-section (1), shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the association or body has been determined under each head of income. (3) Any interest paid by a member on capital borrowed by him for the purposes of investment in the association or body shall, in computing his share chargeable under the head “Profits and gains of business or profession” in respect of his share in the income of the association or body, be deducted from his share. Explanation.—In this section, “paid” has the same meaning as is assigned to it in clause (2) of section 43.

Method of computing a partner’s share in the income of the firm [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

Total income In computing the total income of an assessee, there shall be included all income on which no income-tax is payable under Chapter VII.

Liability of person in respect of income included in the income of another person Where, by reason of the provisions contained in this Chapter or in clause (i) of section 27, the income from any asset or from membership in a firm of a person other than the assessee is included in the total income of the assessee, the person in whose name such asset stands or who is a member of the firm shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be liable, on the service of a notice of demand by the Assessing Officer in this behalf, to pay that portion of the tax levied on the assessee which is attributable to the income so included, and the provisions of Chapter XVII-D shall, so far as may be, apply accordingly: Provided that where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay the tax which is attributable to the income from the assets so included.

Income of individual to include income of spouse, minor child, etc  (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly—   (i) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]  (ii) to the spouse of such individual by way of salary, commission, fees or any other form of remuneration whether in cash or in kind from a concern in which such individual has a substantial interest: Provided that nothing in this clause shall apply in relation to any income arising to the spouse where the spouse possesses technical or professional qualifications and the income is solely attributable to the application of his or her technical or professional knowledge and experience; (iii) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.] (iv) subject to the provisions of clause (i) of section 27, to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart;  (v) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.] (vi) to the son’s wife, of such individual, from assets transferred directly or indirectly on or after the 1st day of June, 1973, to the son’s wife by such individual otherwise than for adequate consideration; (vii) to any person or association of persons from assets transferred directly or indirectly otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse; and (viii) to any person or association of persons from assets transferred directly or indirectly on or after the 1st day of June, 1973, otherwise than for adequate consideration, to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his son’s wife. Explanation 1.—For the purposes of clause (ii), the individual in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater; and where any such income is once included in the total income of either spouse, any such income arising in any succeeding year shall not be included in the total income of the other spouse unless the Assessing Officer is satisfied, after giving that spouse an opportunity of being heard, that it is necessary so to do. Explanation 2.—For the purposes of clause (ii), an individual shall be deemed to have a substantial interest in a concern—   (i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of his relatives;  (ii) in any other case, if such person is entitled, or such person and one or more of his relatives are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern. Explanation 2A.—[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.] Explanation 3.—For the purposes of clauses (iv) and (vi), where the assets transferred directly or indirectly by an individual to his spouse or son’s wife (hereafter in this Explanation referred to as “the transferee”) are invested by the transferee,—   (i) in any business, such investment being not in the nature of contribution of capital as a partner in a firm or, as the case may be, for being admitted to the benefits of partnership in a firm, that part of the income arising out of the business to the transferee in any previous year, which bears the same proportion to the income of the transferee from the business as the value of the assets aforesaid as on the first day of the previous year bears to the total investment in the business by the transferee as on the said day;  (ii) in the nature of contribution of capital as a partner in a firm, that part of the interest receivable by the transferee from the firm in any previous year, which bears the same proportion to the interest receivable by the transferee from the firm as the value of investment aforesaid as on the first day of the previous year bears to the total investment by way of capital contribution as a partner in the firm as on the said day, shall be included in the total income of the individual in that previous year. (1A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child, not being a minor child suffering from any disability of the nature specified in section 80U: Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any—  (a) manual work done by him; or  (b) activity involving application of his skill, talent or specialised knowledge and experience. Explanation.—For the purposes of this sub-section, the income of the minor child shall be included,—  (a) where the marriage of his parents subsists, in the income of that parent whose total income (excluding the income includible under this sub-section) is greater; or  (b) where the marriage of his parents does not subsist, in the income of that parent who maintains the minor child in the previous year, and where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after