Taken from HT epaper, might help you out. Since i have not paid taxes online, i will not be able to give you an insight on it but i would request people who have so that we can get to know more about the system and how easy or difficult it is to file online.

All you need to do to file e-returns

– Go to http://www.incometaxindia.gov.in and click on the ‘Pay Taxes Online’ link appearing to the left of the page.

– The click will take you to a list of 29 banks you can file your returns with. A net banking account with any of these banks is necessary to proceed further.

– Below the names of the banks is a link that takes to a page showing various challans, for example CHALLAN NO. / ITNS280 is for payment of income tax and corporation tax.

– Clicking on the challan no. takes you to a new page, which is the form for filing the e-payment with I-T department.

– Filling the details on the page will direct you to the net banking site where payment details have to be furnished. Once that is done, you will receive an acknowledgement indicating the challan identification number (CIN) and other payment details, which will then have to be submitted at the income tax office to get the final receipt of tax filing.

PROS: e-filing could help meet deadline and save time and money spent on tackling long queues. You save on fees paid to chartered accountants.

CONS: Even after filing returns online, you still have to visit the income tax office to submit a proof of it and get a final receipt. Given the low fees for which you could get a chartered accountant’s services in this country, manual filing still makes more sense to many taxpayers. Low computer penetration and limited net banking facilities prevent many from filing returns online.