How to Pay Income Tax Online: Self-Assessment vs Advance Tax (2026)

Introduction

One of the most intimidating parts of tax compliance is the act of "Payment." Even for high-income earners, the e-filing portal’s payment gateway can be confusing. For AY 2026-27, the process has moved entirely to the "e-Pay Tax" module, which eliminates the old NSDL/TIN burden.

However, the most common mistakes taxpayers make—selecting the wrong Assessment Year or the wrong "Minor Head" code—can lead to your payment being lost in the system. This guide ensures you use the correct digital path to pay your dues under the Income Tax Act 2025.

Legal Reference

Relevant Law: Section 210: Liability for payment of advance tax. Section 140A: Payment of self-assessment tax before filing the return. Section 271C: Penalties for non-payment of tax. Income Tax Act 2025: Current digital payment standards.

1. When to Use Which Code?

The portal asks you to select a "Type of Tax Payment" (Minor Head). Choosing the wrong one is the #1 cause of tax mismatches.

Advance Tax (Code 100)

• Use case: When you are paying tax during the financial year (before March 31).
• Mandatory for: Anyone whose estimated tax liability after TDS is ₹10,000 or more.
• Deadline: Quarterly installments (June, Sept, Dec, March 15).

Self-Assessment Tax (Code 400)

• Use case: When you are paying the balance tax after the financial year ends (after March 31) while filing your ITR.
• Scenario: You realize while filing in July that your TDS was insufficient; you pay the difference as Code 400.

2. Step-by-Step Portal Walkthrough

1. Log in to your account on the Income Tax Portal.
2. Navigate to e-File > e-Pay Tax.
3. Click on New Payment.
4. Crucial Step: Select Income Tax (Individuals).
5. Assessment Year: Select 2026-27 (for income earned between April 2025 and March 2026).
6. Minor Head: Choose Advance Tax (100) or Self-Assessment Tax (400).
7. Enter Amounts: Break down the payment into Tax, Surcharge, and Cess (Education Cess). You can put the entire amount under "Tax" if unsure; the department will adjust it.

3. Payment Modes

• Net Banking / Debit Card: The most reliable and cheapest.
• Pay at Bank Counter: You generate a CRN (Challan Reference Number) and take it to the bank.
• RTGS/NEFT: Used for high-value corporate or HNI payments.

4. Reading Your Receipt (Challan)

Once the payment is successful, you will receive a PDF receipt. You must keep this safe as it contains three identifiers required for your ITR:

1. BSR Code: (7 Digits)
2. Date of Deposit: (DD/MM/YYYY)
3. Challan Serial Number: (5 Digits)

[!TIP] If you paid your tax via e-Pay Tax while logged in, the details will automatically pre-fill in your ITR within 2-3 working days. Always wait for the "Self-Pre-fill" before submitting your return to avoid errors.

5. Identifying the "AY 2026-27" Trap

The most frequent error is selecting the "Financial Year" instead of the "Assessment Year."

• Income Earned in FY 2025-26 = Assessment Year 2026-27. If you select AY 2025-26, your payment will be credited to the previous year, and the portal will show you a "Zero Payment" for your current return.

Conclusion

Paying your taxes online is now a 5-minute process, provided you know your codes. Whether you are paying Advance Tax to avoid Section 234B/C interest or Self-Assessment Tax to clear your final ITR balance, always verify your PAN and the Assessment Year twice before clicking "Pay."

Facing a "Challan Mismatch" error or need help correcting a payment made to the wrong year? Our tax experts help you file rectification requests and ensure every rupee of tax you pay is correctly credited to your PAN for AY 2026-27.