Self-Assessment Tax | Bajaj Markets

What is Self-Assessment Tax and How to Calculate it?

09 Fed 2022
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What is Self-Assessment Tax?

Anyone who earns an income has to pay income tax to the government of India. You might have to bear the consequences if you fail to pay taxes in full. The Self-Assessment tax, also known as SAT, is a type of tax where the assessee is expected to assess their tax liability, and in case any amount is due, it has to be paid to ensure successful e-filing.

The government levies taxes in multiple forms like TDS, TCS, advance tax, and more. With Self-Assessment tax, you need to assess your income and pay the balance tax (if any) after taking TDS, TCS, and advance tax into account. You cannot file income tax returns until your taxes are paid fully. To put it simply, a Self-Assessment tax is the balance tax that you pay on the total income after deducting the paid TDS and advance tax from your tax liability.

Why Should You Pay Self-Assessment Tax?

Self-Assessment tax is generally paid on income from other sources. There can be instances where you miss out on including a certain income while making the final payment of your advance tax; or, there can be a possibility that TDS was deducted at a lower rate. Salaried individuals often come across such instances.

Let us assume that you are a salaried individual. Like every year, your employer has deducted TDS on salary. However, you earned ₹10,000 on a freelance project and you forgot to inform the same. Hence, tax on this income has not been deducted.

Self-Assessment tax comes in handy during such cases. It helps you compare your total tax liability with the tax already paid to pay the balance. Though no specific date of payment is specified for the Self-Assessment tax, it is advisable to pay it as soon as possible. This will help you escape the penalty on the late tax payment.

How Do I Calculate My Self-Assessment Tax?

Self-Assessment tax is calculated and paid by the taxpayer before filing ITR. Here is how you can calculate your Self-Assessment tax:

Particulars

Amount (in ₹)

Total income

8,00,000

Tax on total income according to the applicable slab rate (20%)

31,720

(-) TDS/TCS

29,000

(-) Advance tax

-

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

-

Self-assessment tax to be paid (a-b-c-d)

2,720

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

27

Total payable amount

2,747

Self-Assessment Tax Payment

You can pay Self-Assessment tax online via netbanking according to the steps provided below:

 

  1. Log in to the official income tax website.

  2. Find the ‘e-Pay taxes’ option and click on it.

  3. You will be redirected to the National Securities Depository Ltd. site.

  4. Click on the ‘Challan no./ITNS 280’ button.

  5. Then, click on the ‘(0021) Income tax (other than companies)’ option.

  6. Enter your PAN card, name, and contact details.

  7. Choose the appropriate Assessment year.

  8. Select the ‘Type of Payment’, i.e. (300) Self-Assessment Tax.

  9. Choose from the list of banks to make a payment.

  10. Enter your ‘Tax Payable Amount’.

  11. You will be redirected to the bank’s netbanking page.

  12. Make the payment.

  13. Check the challan displayed for inclusions like CIN, payment details, and name of the bank.

  14. Download a soft copy/print a hard copy.

  15. The same should reflect on your Form 26AS in a few days. In case it does not, fill in the challan details while filing the ITR.

How to Check Self-Assessment Tax Paid in Form 26AS?

Follow the below steps 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. Read the disclaimer and click on the ‘Confirm’ button.

  4. You will be redirected to the TDS-CPC portal.

  5. Here, agree on the acceptance of usage and click ‘Proceed’.

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

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

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

  9. You can view the tax deducted by the employer or any other third party under various sections.

 

What to do if you Choose the Wrong Assessment Year While Paying Tax?

An Assessment year is the one that follows a financial year. The money earned in a financial year is taxed in the consecutive Assessment year. So, the income earned in FY 2021-2022 will be assessed in the AY 2022-2023. However, there can be instances wherein you receive a notice from the Income Tax Department for paying tax in the wrong Assessment year.

Here’s what you must do on receiving such a notice:

The Payment is Made by a Physical Challan

If the tax payment is made using a physical challan, you can change the Assessment year within 7 days of making the payment. However, you need to apply for a correction with the bank within 7 days of the deposit. The challan correction application form will consist of the following fields:

 

  • Name and address

  • TAN/PAN

  • Name of the authorised signatory

 

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

You Realise Your Mistake While Paying Tax

In case you realise your mistake after 7 days, you will have to reach out to the Income Tax Department for the correction of the challan. You send a signed copy of the correction form to the Assessing Officer, who will rectify the details in your challan. The challan correction application 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

Let us explore the various challans applicable for different types of payments.

Types of Payment

Challan

For depositing income tax, corpora

ITNS 280

For depositing TDS and TCS

ITNS 281

For securities transaction tax, hotel receipt tax, estate duty tax, etc.

ITNS 282

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

ITNS 284

For equalisation levy

ITNS 285

Which Taxes Can be Paid Online?

Here are a few taxes that can be paid online:

 

FAQs on Self-Assessment Tax

  • ✔️What is Self-Assessment tax?

    Self-Assessment tax is paid on the assessed income after taking TDS, TCS, and advance tax into consideration. It helps you pay the balance tax amount.

  • ✔️Is there a specific date to file Self-Assessment tax?

    No, there is no specific date to file Self-Assessment tax.

  • ✔️Can I file ITR before paying Self-Assessment tax?

    You need to clear your tax liabilities before paying Self-Assessment tax.

  • ✔️How to calculate Self-Assessment tax?

    To calculate Self-Assessment tax, you need to subtract tax credits like TDS, TCS, advance tax, and relief fund. You must then include the interest on your Self-Assessment tax.

  • ✔️Can I pay Self-Assessment tax online?

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