A Step-by-Step Guide to Filing Tax with Challan 280 for Advance Tax or Self-Assessment

Every taxpayer faces a moment when the employer’s tax deduction doesn’t cover the full liability.

That’s when Challan 280 comes in.

It’s the official way to deposit tax directly with the government, whether you’re paying in advance during the year or clearing the balance before filing your return. Using it correctly prevents interest charges, avoids notices, and gives you confidence that your records are in order.

Here are the key points that will guide you through using Challan 280 the right way:

Understanding Challan 280

Challan 280 is more than just a tax form; it is the official channel for paying dues that are not automatically handled through TDS. It covers income tax, surcharges, cess, and penalties for both individuals and businesses. Since liability depends on the applicable income tax slab rate, this challan becomes essential for settling amounts that remain after deductions. Without it, managing tax payments correctly would be far more complicated.

Here are the two key aspects that every taxpayer should know about Challan 280:

What is Challan 280?

Think of Challan 280 as the gateway for tax payments outside of TDS. Officially called Challan No 280, it’s a form designed to let individuals, firms, and companies pay income tax, surcharges, cess, and even penalties. Most people use it as an income tax challan 280 for either advance or self-assessment tax. Without this instrument, many taxpayers would struggle to stay compliant.

Who Should Use Challan 280?

It isn’t just for business owners. Salaried individuals who earn rental income, trade stocks, or receive foreign dividends often discover extra tax liability after reviewing Form 26AS. Freelancers and consultants, whose income isn’t taxed at source, also rely on Challan 280. Essentially, anyone with tax dues beyond TDS must use it.

Key Differences: Advance Tax vs Self-Assessment Tax

Both types of payments flow through Challan 280, but their timing sets them apart.

• Advance Tax: Paid in installments during the financial year if the liability exceeds ₹10,000. Missing these deadlines attracts interest under Section 234B or 234C. The advance tax challan 280 is the standard method for such payments.
• Self-Assessment Tax: Calculated at year-end, before filing the income tax return. It covers any shortfall not met by TDS or advance tax.

While estimating advance tax, factor in deductions like deduction under section 80C to reduce taxable income before depositing through Challan 280.”

Preparations Before Filing Challan 280

Jumping straight to payment often leads to mistakes. A smarter approach is to prepare in advance:

• Gather your PAN, bank account details, and income records.
• Review Form 26AS to confirm the TDS deducted so far, and then calculate your net liability after accounting for eligible tax saving options under the Income Tax Act
• Calculate your liability after deductions under Sections 80C, 80D, and others.
• Decide if you’ll pay digitally or through a bank branch.

Most taxpayers today choose to Challan 280 pay online because it’s faster, secure, and automatically updated in government records. Still, offline filing remains an option for those who prefer it.

Step-by-Step Process of Filing Challan 280 Online

Step 1: Visit the Income Tax Portal

Start at the e-Pay Tax section of the official portal. It’s the dedicated channel for all electronic tax deposits.

Step 2: Select Challan 280

Choose Challan No 280 (ITNS 280) from the list. Individuals must pick “Income Tax (other than companies).” Firms and companies have separate categories.

Step 3: Provide Personal and Tax Details

Enter PAN, assessment year, and contact information. Then, select the type of payment: advance tax, self-assessment, or others. Accuracy here is crucial because errors delay processing.

Step 4: Fill in the Tax Amount

Break down the amount into tax, surcharge, cess, and any interest or penalty. Always cross-check calculations before submission.

Step 5: Choose the Mode of Payment

Select from net banking, debit card, or over-the-counter payment. Online payments are recommended because they post faster to the system.

Step 6: Generate the Receipt

Once payment is confirmed, download the receipt with the Bank Serial Number (BSR), date, and Challan Identification Number (CIN). These details are mandatory for return filing.

Before filling the payment details, many taxpayers double-check liability using an online tax calculator to avoid underpayment or overpayment.

Offline Filing of Challan 280

For those who prefer traditional methods, offline filing is still valid. Request Challan 280 at an authorized bank, fill it manually with PAN, year, and payment details, and submit with cash or check. The bank stamps the form and returns a copy as proof. While slower, this method suits taxpayers who want in-person interaction.

Common Mistakes to Avoid While Filing

Here are the mistakes to watch out for when filing Challan 280:

• Selecting the wrong assessment year: Payments tied to the wrong year won’t be credited against the correct liability, which can lead to duplicate demands.
• Entering incorrect PAN or bank details: A single digit out of place can block the transaction from being matched to your account.
• Choosing self-assessment when advance tax was due, or vice versa: Misclassification changes how the system records the payment and may attract interest.
• Ignoring Form 26AS before payment: Skipping a reconciliation step often results in paying too much or too little, both of which create future complications.

Post-Payment Steps and Verification

After completing the payment with Challan 280, it is important to take a couple of follow-up actions. These steps ensure the payment is recorded in the government’s system and linked correctly when filing your income tax return.

Here are the key checks to make after depositing your tax:

Confirm in Form 26AS

After paying through Challan 280, log in to check Form 26AS. The payment typically shows up within a week under “Tax Paid.” If it doesn’t, contact your bank with the CIN.

Enter CIN While Filing ITR

Your income tax return requires the CIN, BSR code, and payment date from your receipt must be entered in the ITR during income tax return filing, so the system validates the payment. Including these ensures the system validates the payment against your account. Without it, the return may not process smoothly.

Benefits of Using Challan 280 Correctly

Handling taxes with Challan 280 reduces stress at filing time. It avoids penalties and interest, keeps your record clean, and ensures the system acknowledges your payments without dispute. More importantly, it builds trust in your financial discipline.

Practical Tips for Taxpayers

Paying with Challan 280 is straightforward once you develop a routine. A few habits make it easier:

• Double-check the assessment year before every payment.
• Prefer online transactions for speed and traceability.
• Maintain both digital and printed copies of receipts.
• Marking quarterly advance tax deadlines in a planner and verifying liability with an Income Tax Calculator helps avoid last-minute stress. Regular use of an advance tax deposit challan prevents a last-minute scramble.

Closing Thoughts

Compliance doesn’t have to feel complicated. Challan 280 streamlines tax payments for individuals and businesses, whether it’s advance installments or final self-assessment dues.

With careful preparation, accurate entries, and timely verification, it turns a potentially stressful task into a straightforward process. Staying ahead with the right tax deposit method means fewer penalties, smoother return filing, and greater peace of mind.

Related Articles:

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Intimation Under Section 143(1) of Income Tax Act
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