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Every individual earning an income has to pay Income Tax to the Government of India. That being said, if the taxes due aren’t paid in full, it could cause issues. The Self-assessment tax revolves around tax filing itself. If this tax is due, it has to be paid to ensure e-filing is done successfully. After all, taxes are collected by tax payers in different forms, including Advance Tax, TDS as well as Self-Assessment. Self-assessment tax refers to any balance tax that has to be paid by an assessee on his assessed income after the TDS and advance tax have been taken into account before filing the return of income. The IT return cannot be submitted to the IT Department till the time the taxes have been paid. At the end of the year, if there is any tax that is pending before filing the ITR, there is a final amount that has to be calculated. This is known as the Self-Assessment Tax or SAT. To put it simply, Self-Assessment Tax is the balance tax that an assessee pays on the income that has been assessed, only after taking the TDS as well as advance tax into consideration before he or she files the return of income.
Self-Assessment Tax is a tax that is paid by an individual in relation to the income from other sources. If the taxpayer misses out on some income while making the final payment, TDS might not have been deducted or might have been done at a lower rate. While there is no exact date of payment, the tax is always paid for the end of a particular year. Paying it as soon as possible helps in avoiding the interest on the tax amount. Since this tax has to be paid before the Income Tax Returns are filed, it has to be done in the same assessment year. While there is no particular date of paying this tax, it can be done upon filing a tax challan ITNS 280 either online or at the bank.
The Self-Assessment Tax can easily be paid online via net banking in the following manner:
Log in to the income tax website www.incometaxindia.gov.in
Sign in and click on the e-Pay taxes option
You will be redirected to the National Securities Depository Ltd. site
Select the ‘Challan no./ITNS 280’ tab, and then the ‘(0021) Income tax (other than companies)’ option
Fill your details: PAN card, name and contact coordinates
Choose the applicable assessment year that you will be making payment for
Select the ‘type of payment’ – (300) Self Assessment Tax
Choose the bank and make the payment
Enter the ‘tax payable amount’
You will be redirected to the bank’s net banking page for making the payment
Make the payment
Check the challan displayed for inclusions like CIN, payment details and name of the bank
Save a soft copy or print a hard copy if required.
It should reflect on your Form 26AS in a few days. If it doesn’t reflect, fill in the challan details while filing the ITR.
If payments for tax have been made before the assessment date, the interest can be calculated in the following ways:
The amount of the advance tax that hasn’t been paid is the amount considered for calculating the interest for the date until the payment of the SAT.
The SAT will be subtracted from the advance tax amount, to be considered for computation from the time the SAT payment has been made.
Simplified steps to follow:
Make use of the income tax slabs that are available online
Calculate the taxable amount that is payable on your total income
After that, add the interest payable under Sections 234A, 234B and 234C
After that amount has been added, the relief amount should be deducted under Sections 90 and 90A from the total amount
The MAT credit amount under Section 115JAA has to be deducted
Subtract the advance tax amount
You will reach the self-assessment tax that is payable on your income tax
If there is any tax liability that is payable even after taking the TDS and advance tax into account, it can be paid by self-assessment tax during the time frame starting form 01 April of the assessment year. This is where Form 26AS comes in handy. Form 26AS is a tax passbook which helps a taxpayer verify if the taxes that he or she has paid are available in his tax passbook. Using this, a credit can be claimed at the time of filing of the income tax return. If there is a mismatch of any sort, the taxpayer must ensure that his details are mentioned correctly in the TDS returns or that he has filed all his details in the tax challan the right way.
What do you mean by Self-Assessment Tax?
Self-Assessment Tax is the balance tax which has to be paid by a taxpayer on his or her assessed income once the advance tax and TDS are taken into account for filing the Income Tax Return. Since, the income tax return cannot be submitted to the Income Tax Department until all the taxes have been paid, the self-assessment tax serves as the final chance for clearing off the taxes before filing the income tax return.
Is there any specific date for filing the Self-Assessment Tax?
No, there is no specific or exact date for filing the self-assessment tax, however, it has to be done prior to filing the Income Tax Return. This tax can be paid by filing a tax challan ITNS 280 that can be filed either at a bank branch or online.
Is it necessary to pay self-assessment tax?
Self-assessment tax is a type of tax that is paid by the taxpayer in relation to his or her income from other sources. In case he misses out on a portion of the income when he is making the final payment, it is possible that the TDS hasn’t been deducted or the payment has been done at a lower rate. The self-assessment tax then comes in handy as you can pay it as soon as possible and avoid the interest on the taxable amount. Thus, it is not necessary, but a good practice to adopt to keep your tax-paying habit in check.
What is the procedure for filing a Self-Assessment Tax?
You can go through the following step for filing your self-assessment tax:
First and foremost, log on to www.incometaxindia.gov.in (the official income tax website )
Then, sign in and click on the e-Pay taxes option
You will then be redirected to the National Securities Depository Ltd. site
Here, select the ‘Challan no./ITNS 280’ tab, and then the ‘(0021) Income tax (other than companies)’ option
Fill in all the necessary details such as your name, contact details, PAN card number etc.
Following this, choose the appropriate year for assessment for which you have to make the payment
Select the payment type - (300) Self Assessment Tax
Click on the relevant bank and then initiate the payment
Enter the amount that is payable as tax
After this, you will be redirected to the bank’s net banking page for making the payment
You can now make the payment
Make sure you check the challan displayed for inclusions like CIN, payment details as well as the name of the bank
How is the interest calculated for computing self-assessment tax?
If the payment for taxes is made before the assessment date, the interest can be calculated in the following manner: the amount of advance tax which has not been paid is the amount that is considered to calculate the interest for the date until the payment of the self-assessment tax. Another way of working this would be subtracting the self-assessment tax from the advance tax amount in order to be considered for computation from the time the payment of the self-assessment tax has to be made.
What is Form 26AS?
Form 26AS acts a tax passbook that helps the taxpayer in verifying if the taxes paid are available in his tax passbook. It helps the taxpayer to claim a credit at the time he is filing in the income tax return. The taxpayer must ensure that he checks all the details entered in the tax challan.
Are there any simple steps for calculating the self-assessment tax?
Yes, you can follow these simple steps for calculating the self-assessment tax:
Scan through the income tax slabs online
Calculate the amount that is tax-payable on your total income
Then, add the interest payable under sections 234A, 234B and 234C
Once the amount is added, the relief amount must be deducted under Sections 90 and 90A from the total amount
The MAT credit amount under Section 115JAA has to be deducted
Then, subtract the advance tax amount
Finally, you will reach the self-assessment tax that is payable on your income tax