Do you earn an income? If you do, you must pay taxes to the government, or you will have to bear the consequences. The government collects the taxes on your income based on the slab rate your income falls under through the following means:

  • Tax Deducted at Source (TDS)

  • Advance Tax

  • Self-assessment Tax


In this article, we will dive into the depths of ‘self-assessment tax’. Read on to learn more about what it is, its example, its computation method, and more.

What is ‘Self-assessment Tax’?

Self-assessment tax, also known as ‘SAT’, is a system under which taxpayers can compute and report their own tax liabilities to the Indian government. This type of tax is applicable in countries like India, where taxpayers have multiple sources of income, such as rental income, self-employment income, investments, businesses, and more. 


If the taxes which are due are not paid in full, it could lead to certain legalities. The SAT revolves around the concept of tax filing. If this tax is due, it must be paid in order to ensure that the e-filing has been completed successfully. The government levies taxes in several forms such as TDS, Advance tax, self-assessment tax, TCS, and more. 


Self-assessment tax is the balance tax which must be paid by the taxpayer on the income. This income must be assessed after advance tax, and TDS are taken into consideration prior to the filing of the income tax return. The income tax return can’t be submitted to the Department of Income Tax until the total taxes have been paid. At the end of a particular financial year, if any tax amount is due before filing the ITR, the SAT has to be computed. 


This type of tax is designed to ensure that the taxpayers take ownership of their own tax affairs, and pay correct tax at the right time. 

Advance Tax v/s Self-assessment Tax

According to the provisions of the IT Act, 1961, both the advance tax and the self-assessment tax are paid to the IT Department. Following are a few differences between the two:

Basis of Comparison 

Advance Tax

Self Assessment Tax


Refers to a portion of the yearly tax liability which the taxpayer pays in advance. 

Refers to the tax amount an assessee pays on their assessed income after deducting the advance tax and the TDS. 

Due date 

Based on the payable tax amount.

No specified due date. However, it must be filed prior to the date of the ITR filing. 

Who can pay?

Salaried and self-employed individuals who have a liability of tax of an amount exceeding ₹10,000 in a specific financial year.

An individual is liable to pay the SAT with respect to their ‘income from other sources’.

Why Should You Pay Self-assessment Tax?

Self-assessment tax (SAT) is generally paid on the ‘Income from Other Sources’. You may miss out on including a certain income while making the final payment of your advance tax; or, the TDS was deducted at a lower rate. Salaried individuals often come across such instances. 


Suppose you are a salaried employee. Like every year, your employer has deducted TDS on your salary. However, you earned ₹10,000 on a freelance basis and you forgot to inform them about the same. Hence, the tax on this income does not get deducted. In such cases, self-assessment tax comes to your rescue. It helps you compare your total tax liabilities with the tax which has been paid already in order to pay the balance. Although there is no specified date for the payment of self-assessment tax, it is advisable to pay it as soon as possible. This will, therefore, help you escape the penalty that may have been levied against you on the late payment of tax.

How to Calculate Self-assessment Tax

In order to compute your SAT, you first need to determine your total income for the financial year from all the sources. This may include self-employment income, rental income, and investments. Next, you should identify any kind of deductions or the allowances which you may be eligible for, such as the expenses related to your self-employment charitable donations, or pension contributions. 


After having calculated your total income from all sources and identifying the applicable allowances or deductions, follow the steps given below:

  • Step 1: Deduct all the tax exemptions and deductions, such as the investments made u/s 80C, 80D, and several other deductions.

  • Step 2: Compute the tax applicable on the due amount according to the tax slab rates. This is your total taxable amount. 

  • Step 3: Use the following formula to compute the self-assessment tax:

[(X+Y) - (A+B+C+D)]



X = Total taxable amount

Y = Interest according to the sections 234A or 234B or 234 C

A = Tax relief u/s 90 or 90A or 91

B = MAT credit u/s 115JAA


D = Advance tax 

You must note that the interest u/s 234A of the Income Tax Act, 1961, will be paid if there is a case of late filing of the ITR. Sections 234B and Section 234C will only be applicable if there is a case of late advance tax payment.

Example of Self-assessment Tax

Self-assessment tax is computed and paid by the taxpayer before the filing of the ITR. Here is an example of how you can calculate your self-assessment tax:


Amount (in Rs.)

Total income


Tax on total income according to the tax slab rate which is applicable (10%)




(-) Advance tax


(-) Tax Relief as per Sections 90, 90A, 91


Self-assessment tax to be paid


(+) Interest as per Section 234A, 234B, and 234C


Total payable amount


How to Pay Self-assessment Tax Online?

Here’s how you can pay the self-assessment tax online:

  • Step 1: Navigate to the official Income Tax Department website (

  • Step 2: Sign in to the page, tap on the option ‘e-Pay taxes’ in order to get redirected to the official NSDL website .

  • Step 3: Choose the option ‘Challan no. /ITNS 280’, followed by the option ‘0021 (other than companies)’

  • Step 4: Enter personal information such as your name, contact details, address, PAN card number, and so on

  • Step 5: Select the appropriate assessment year for which the Self-assessment tax payment has to be made

  • Step 6: Under the option ‘type of payment’, choose ‘Self-assessment Tax’

  • Step 7: Opt for the preferred bank amongst the list of options to proceed to the payment

  • Step 8: Enter the payable taxable amount

  • Step 9: Complete the payment process


A challan will now be generated containing a representation of your transaction along with your bank’s name and CIN in detail. It would be wise to keep a hard/soft copy of the generated challan for future reference. This challan will then reflect on your Form 26AS after a couple of days. However, if it does not get displayed, you can fetch the details while filing your ITR for that particular financial year.

What is Form 26AS?

Your challan which gets generated after the completion of your SAT payment, gets reflected on your Form 26AS after a couple of days. What is Form 26AS? Well, sometimes you may be liable to pay taxes even after taking into consideration the advance tax and the TDS. In such a case, you can pay it via SAT during the time period, beginning from April 1st of that assessment year. This is where Form 26AS comes into play.


Form 26AS is a tax passbook which aids you to verify if your paid tax is available in your tax passbook or not. With the help of this form, you can claim a credit when filing the ITR. You should ensure that all your mentioned details are correct in the TDS returns, or everything has been filed in the tax challan accurately.

How to Check SAT in Form 26AS?

Follow the steps given below to check your paid Self-assessment tax in Form 26A:

  1. Login to the official e-filing portal.

  2. Click on the ‘View Form 26AS (Tax Credit) link in the ‘My Account’ menu.

  3. Go through the disclaimer and click on the ‘Confirm’ button.

  4. Click on ‘Agree’ and click ‘Proceed’ on the TDS-CPC portal which displays.

  5. Click on the ‘View Tax Credit (Form 26AS)’ option.

  6. Select the ‘Assessment Year’ and ‘View Type’.

  7. Click on the ‘View/Download’ option.


You will now be able to view the tax which your employer or any other third-party deducts under different sections.


If you calculate the self-assessment tax incorrectly, the return will be considered as defective. Currently, the provisions under the Income Tax Act let taxpayers sort their returns within fifteen days of filing ITR. Nevertheless, if you fail to rectify such errors, your filed return will be declared as defective.

The Payment Made by a Physical Challan

If you make the tax payment by using a physical challan, you can change the assessment year within seven days of completing the payment. However, you need to apply for a correction with the bank within seven days of the deposit. The challan correction application form will consist of the following fields:

  • Name and address


  • Name of the authorised signatory


Along with the aforementioned fields, you also need to include details about your challan, i.e. challan serial number,date, and the BSR code.


In case you realise your mistake after 7 days, you will have to reach out to the Income Tax Department to get the challan corrected. Send a signed copy of the correction form to the Assessing Officer, who will rectify the mistakes in your challan. The application for your challan correction must include the following details:

  • Name, address, and PAN details

  • Details about the assessing officer

  • Challan details

  • BSR code

  • Amount paid

  • Assessment year as per the challan

  • Correct Assessment year

Challans Applicable for Different Types of Payment

Here are the several challans applicable for different types of payments:

Types of Payment


For depositing TCS and TDS 

ITNS 281

For the equalisation levy

ITNS 285

For the assets for the corporates and the non-corporates and undisclosed foreign income

ITNS 284

For hotel receipt tax, securities transaction tax, estate duty tax, and more

ITNS 282

For depositing corporation and income tax

ITNS 280


In conclusion, self-assessment tax is an important obligation for individuals and businesses to fulfil their tax liabilities to the government. It requires individuals to declare their taxable income, calculate their tax liability, and pay any outstanding tax by the deadline. If you fail to do so, it may result in certain legal penalties and consequences.


Hence, it is important that you keep a track of your income, expenses, and tax payments done throughout the year, and file your ITR in a timely manner. If you fulfil your self-assessment tax requirements, you will contribute to the country’s revenue. You can also support the public services and infrastructure which will benefit the society as a whole.

FAQs on Self-assessment Tax

No, there is no specific date to file self-assessment tax.

You need to clear your tax liabilities before paying self-assessment tax.

You can pay Self-Assessment tax online via the official income tax website.

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