Paying income tax online is not just a banking step. The taxpayer must first create the correct challan, select the correct tax category and year, complete payment, and preserve evidence that the payment has been recorded. The Income Tax Department's e-Pay Tax FAQs state that generation of a Challan Form through the e-Pay Tax functionality is mandatory for direct-tax payment and that every generated challan carries a unique Challan Reference Number (CRN).
What can the e-Pay Tax service do?
The e-Pay Tax service brings challan generation, payment and payment-history functions into the e-Filing portal. It is available both before login and after login. The Department's Create Challan Form (CRN) user manual says the service can be used by taxpayers, eligible ERIs/CAs, representative assessees and tax deductors or collectors.
For a pre-login payment, a valid active PAN or TAN and a valid mobile number are needed. A post-login user needs access to the registered e-Filing account. Post-login is often more convenient for a taxpayer who wants the challan and payment history tied visibly to the account.
Step 1: identify what you are actually paying
Before generating a challan, distinguish the nature of the payment. Advance tax is tax paid during the year based on estimated liability. Self-assessment tax is the residual tax paid after the final return computation, after giving credit for taxes already paid or collected. Tax on regular assessment is generally linked to an assessment demand. Selecting the wrong payment type can create avoidable reconciliation work even when money has reached the Government.
The portal's challan manual specifically asks the user to select the applicable tax-payment tile and the relevant type of payment. If unsure, the portal provides a "Find your tax payment category" facility. Do not select a minor head merely because its label looks familiar.
Step 2: select the applicable law and payment tile
The 2026 transition makes this step more important than in earlier years because the portal can require selection of the applicable Income Tax Act. For payments governed by the Income-tax Act, 2025, the Department's ITNS 280N FAQ states that the form covers common payments including self-assessment tax, advance tax and tax on regular assessment.
Do not assume that every payment made after 1 April 2026 belongs to the new Act. The correct law depends on the period and liability to which the payment relates. Where the portal presents an Act-selection step, reconcile it to the tax year or assessment year and the underlying obligation before continuing.
Step 3: generate the Challan Reference Number
After selecting the appropriate payment tile, enter the required challan details and generate the Challan Form. A unique CRN is created. The Department treats CRN generation as mandatory for payments made through e-Pay Tax.
Think of the CRN as the identifier for the payment attempt, not as proof that tax has already been paid. A generated challan can still remain unpaid or expire. Payment evidence should therefore be checked separately after the banking step is completed.
Step 4: choose a payment mode
The Department's Tax Payment Modes user manual and e-Pay Tax FAQs list multiple modes, including net banking, debit card, payment gateway, over-the-counter payment and RTGS/NEFT, subject to the mode and bank available for the transaction.
For non-authorised banks, the Department states that taxpayers can use NEFT/RTGS or payment-gateway routes. The list of authorised banks is dynamic, so a professional should rely on the live portal rather than an old saved list when advising a client which route is currently available.
Step 5: watch the challan validity period
The Department's Create Challan FAQ states that a generated challan generally has to be paid within 15 days from CRN generation. For advance tax, payment must be made within 15 days from CRN generation or by 31 March of the current financial year, whichever is earlier.
If a challan expires, do not treat the old CRN as a completed tax payment. Generate the appropriate fresh challan and follow the portal workflow applicable at that time.
Worked example: paying self-assessment tax
Assume an individual completes the return computation and finds ₹18,500 still payable after considering TDS, TCS and taxes already paid. The taxpayer should not choose advance tax merely because the payment is being made online. The liability is a residual return-stage amount, so the appropriate self-assessment tax category should be selected for the applicable year and law. After generating the CRN, the taxpayer pays ₹18,500 using an available payment mode and then checks the payment record before filing the return.
The same logic applies to a company or professional firm: first classify the liability, then create the challan. The bank transfer should follow the tax classification, not determine it.
How to verify that the payment was recorded
Post-login users can view generated challans and payment history on the e-Pay Tax page. The e-Pay Tax service also provides Challan Status Inquiry functionality for specified purposes. The Department's FAQ states that CSI files available through this service cover challan payments made on or after 1 July 2022, while earlier payments follow the older process.
For return preparation, retain the challan/payment receipt and reconcile the payment details with the tax computation. Do not rely only on a bank debit message. A debit proves that money left the bank account; the tax record is what matters for claiming the payment correctly.
Common mistakes to avoid
- Wrong year: verify the year to which the liability belongs before creating the challan.
- Wrong type of payment: distinguish advance tax, self-assessment tax and regular-assessment demand.
- Wrong Act during the transition: a payment date after 1 April 2026 does not by itself determine which Income Tax Act governs the liability.
- Treating CRN generation as payment: the challan identifier is created before successful payment.
- Ignoring expiry: a generated challan has a validity period; do not leave an unpaid CRN indefinitely.
- Keeping only bank evidence: preserve and reconcile the tax-payment record as well.
A CA's pre-payment checklist
- Confirm PAN/TAN and taxpayer name.
- Identify the liability and the period to which it relates.
- Select the applicable Act, year, major head and payment type shown by the live portal.
- Cross-check the amount against the tax computation before generating the challan.
- Choose an available banking mode and complete payment before the CRN expires.
- Save the payment receipt and reconcile it with payment history and the return or demand being discharged.
Key takeaway
The safest way to use e-Pay Tax is to treat tax classification and payment as two separate controls. First identify the correct liability, year, Act and payment type; then generate the mandatory CRN and complete payment through an available mode. Finally, verify the payment in the tax records and retain the challan trail. This simple sequence prevents many avoidable errors caused by selecting the wrong year or minor head or assuming that a bank debit alone completes the tax-compliance process.
