What is Self Assessment Tax?

Self assessment tax is the balance tax calculated and paid after deducting the TDS and advance tax paid in the financial year. For a more straightforward understanding, if during the assessment year, it is found that an assessee (a person liable to pay tax) has additional tax liabilities after factoring in the TDS and advance tax paid in the preceding year, they need to pay SAT to the government.

The return filing will not be considered complete without processing the self assessment tax.

Unlike the due date for tax payment, there is no specific date to pay self assessment tax. SAT can be conveniently paid by filing a self-assessment tax challan ITNS 280 online or at a particular bank branch. You only need an active net banking account to complete the filing and payment online.

While there is no deadline to pay self assessment tax, ensure that you make the payment before filing income tax returns for the financial year, or interest will be charged on the tax.

Now that the self assessment tax meaning is clearer, you may wonder why the need to pay SAT arises in the first place. Considering ITR filings are done meticulously, and experts also do the tax calculation, how does this balance tax amount show up after the financial year?

Here are some reasons that may lead to the self assessment tax amount:

• The taxpayer may have omitted some income while paying the advance tax.
• You might have received unexpected windfall gains or income from other sources
• The TDS amount deducted may be incorrect.
• As an employee, you may have earned a significant amount of returns from fixed deposits and mutual funds that the employer may be unaware of.

Therefore, to keep the inaccuracies in tax payment at bay, the income tax self assessment tax payment is necessary.

The calculation and payment of tax via this mechanism are to be done by the individual taxpayer. This can be quickly done by learning about the total taxable income, tax amount, the amount deducted, and the amount exempted.

Let us understand the self assessment calculation by looking at these easy-to-follow steps:

Having understood what self assessment is and its calculation, let us figure out how we can pay it conveniently online.

• Visit the Tax Information Network (TIN) website.
• Select the ‘e-payment: Pay Taxes Online’ option under ‘Services.’
• Select self assessment tax Challan No./ITNS 280 and click “Proceed”

Self assessment tax payment is a crucial part of ITR filing process and should not be skipped to ensure that no heavy tax liabilities in the form of penalties are levied on the taxpayer. It is equally important to be honest about your income from various sources so that the discrepancy in the tax amount to be paid can be minimized.