ITRTaxation

What is The Difference Between E-Filing And E-Payment?

E-filing is the process of electronically filing income tax returns, whereas E-payment refers to the process of electronically paying taxes. Click here to know more about their process and benefits.

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E-filing is an abbreviation for electronic income tax filing. E-filing is the process of electronically filing your ITR online for a specific year.  This means now you do not need to visit the nearest Income Tax Department office to file your returns. Instead, you log on to the internet and complete the task.

What is E-payment?

They are referred to as online payment systems. Typically, e-payments are made using debit and credit cards, direct bank deposits, and e-checks; however, other e-payment methods such as e-wallets, bitcoin, cryptocurrencies, and bank transfers are gaining popularity.

The Major Difference Between E-filing and E-payment

E-filing is the ITR filing online which means a process of electronically filing income tax returns, whereas E-payment refers to the process of electronically paying taxes (via net banking for SBI’s debit/credit card). The taxpayer can easily and quickly discharge his obligations of tax payment and return filing by using the e-payment and e-filing facility. ​

KNOW THE DIFFERENCE BETWEEN E-FILING AND E-PAYMENT

Process of E-Filing ITR System

The section walks you through a step by step process of e-filing ITR.

  1. Sign up on an ITR Portal: First step for ITR filing online register on an ITR online portal, you need to provide your PAN, name, and date of birth. Then you have to enter a password. Remember that your PAN serves as your user ID.
  2. Choose the appropriate ITR form: Download the ITR e-filing form that applies to you.
  3. Form completion: The ITR form can be completed through both ITR online and offline. Go to “Forms/Downloads – Income Tax Forms,” download the Income Tax Return Utility, and save it to your system to fill the offline form. After filling out the information in the utility, you must upload it to the website.
  4.  Recognition and verification: After returning to the ITR e-filing site, you will receive an acknowledgement in the form of an ITR-V. Suppose your Aadhar details are not updated on the Income Tax website. In that case, you must send a physical signed copy of your ITR-V to the Income Tax Department at the address listed on the ITR-V to complete the ITR e-filing online process within the next 120 days via regular mail or express mail.
  5.  Refund of taxes: A tax refund is issued when the tax score is less than the taxes paid. Taxpayers often receive a tax refund on their income tax if the amount owed is less than the total amount of withholding taxes and estimated taxes paid.

Benefits of E-Filing ITR

Following are the benefits of e-filing ITR.

Refund

A portion of a taxpayer’s salaried or self-employed earnings is deducted as a refund (TDS). However, if your investments are deductible from taxable income, your tax liability based on your income tax bracket may be much lower than what you have already paid. Extra tax paid can be claimed and refunded, but only if your taxes are filed. That’s why you should choose ITR e-filing.

Visa

Most countries ask a visa for international travel. You must have filed your tax returns within the last few years as an Indian to process your visa. These returns must be presented to officials from the destination country’s embassy or consulate.

Loans

For any loan, banks will require you to provide tax returns for the previous few years as part of the documentation.The results will be used to assess your financial situation. Your application may be declined if you do not have any returns.

Credit card

If credit card issuers want to know if the credit card application will be able to repay the credit? Then an income tax return can be used to show a person’s income. You may not be able to obtain a higher credit limit if you do not provide income tax returns.  

Loss adjustment

Under current tax laws, a person can carry forward losses to offset future taxable earnings for up to eight years. If you have, you can use your income tax returns to build a case and move forward/adjust the losses against your future taxable income.

Process Of E-payment

E-payments work in the following three steps.

Payment initiation

The customer completes the product/service and selects a payment method to begin the money transfer.  

Transaction

After choosing the payment method, the customer enters the necessary information such as card number, CVV, personal information, expiration date, PIN, and so on. The chosen payment method either redirects the customer to an external payment page or a bank’s payment page to complete the payment process.

Payment authentication

The operator authenticates the information submitted by the customer and other details such as payment information and customer account information. The operator could be a payment gateway or another solution. If authentication is complete, the operator reports a successful transaction.

Benefits Of E-Payment System

The following are the benefits of e-payment systems.

  • E-payments are more efficient because they are faster
  • Customers can pay online at any time and location with e-payments, making them easily accessible and convenient for customers. Because many payment processing solution providers offer various types of solutions, it is simple to integrate online payment solutions with businesses
  • Online payment solutions include security, risk management, and anti-fraud tools, making them dependable and secure for customers and merchants
  • E-payments have proven to be highly effective for international transactions because they are less expensive, simpler, faster, and, in general, real-time. People are almost at ease with online shopping and electronic payments. Accepting online payments is now a must for any business in this day and age
  • Shopping and banking are becoming more convenient as a result of e-payments. They assist customers in reaching more clients both locally and globally
  • E-payments are more efficient because they are faster
  • Customers can pay online at any time and location with e-payments, making them easily accessible and convenient for customers
  • Because many payment processing solution providers offer various types of solutions, it is simple to integrate online payment solutions with businesses
  • Online payment solutions include security, risk management, and anti-fraud tools, making them dependable and secure for customers and merchants
  • E-payments have proven to be highly effective for international transactions because they are less expensive, simpler, faster, and, in general, real-time.

 

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