Self assessment tax: Calculation and online payment.

Self-assessment tax (SAT) and advance tax are two ways in which taxpayers pay income tax to the government. A SAT refers to the amount a tax assessee pays after the Tax Deducted at Source (TDS) and advance tax is deducted. One must pay a self-assessment tax before filing income tax returns (ITR).

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See also: Income tax assessment order: What is it and why is it issued?

What is self-assessment tax?

Self-assessment tax is the tax one is liable to pay after deducting the TDS and advance tax paid in a financial year. One pays self-assessment tax if there is any pending tax liability during the assessment year, after considering deductions and taxes paid, at the end of a financial year. One must pay self-assessment tax by submitting Challan 280.

Self-assessment tax: Points to remember

The ITR filing process is incomplete unless the total tax amount is paid. An invalid submission of tax returns may result in a higher interest rate on the tax due and other penalties.
There is no specific due date to pay the self-assessment tax. However, SAT payment must be made before ITR filing for the financial year to avoid the interest charged on

Self-assessment tax calculation

The individual taxpayer must evaluate the total taxable income, tax amount, deductions and exemptions to pay the self-assessment tax.

Compute the total income, including salary, income through dividends, interest income, rental income, etc.
Calculate the net taxable income by subtracting the tax deductions and exemptions from the total taxable income, including standard deduction, house rent allowance (HRA), health insurance premium and tax-saving investments, such as NPS and PPF.
Assess the tax liability considering the net taxable income.
From this amount, reduce paid taxes, such as TDS, advance tax, interest income, etc. The final amount would be the self-assessment tax (SAT).

Why should you pay self-assessment tax?

A self-assessment tax must be paid by individuals earning income from other sources. It helps eliminate inaccuracies related to one’s taxable income.

The tax must be paid in the following cases:

When taxpayers fail to consider an income while paying advance tax.
The deducted TDS amount is inaccurate.
Salaried individuals may gain substantial income through investments, such as fixed deposits (FD) and mutual funds, unknown to the employer.

How to pay self-assessment tax online?

Taxpayers can visit the official portal of the income tax department at https://www.incometaxindiaefiling.gov.in and click on the ‘e-Pay tax’ option. They would be redirected to the NSDL website to complete the process.

Go to the Income Tax Department’s Tax Information Network portal https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Select Challan number 280 (ITNS 280). Click on ‘Proceed’.

On the next page, under ‘Tax Applicable’, select ‘(0021) Income-tax (other than companies)’. Click on ‘(300) Self-Assessment Tax’ under ‘Type of Payment’.

Select the preferred payment mode – net banking or debit card.

The assessee must provide all the required details, fill in the captcha code and click on ‘Proceed’.
After making the payment, download the challan.

The details of the self-assessment tax (SAT) payment will appear in Form 26AS.

How to pay self-assessment tax offline?

One can pay self-assessment tax offline by visiting their bank branch and following the below steps:

Visit the bank branch to get the Challan 280 form
Provide the required details as provided in the official TIN-NSDL portal
Submit the duly filled Challan 280 form along with the money. The payment can be made in cash or through a cheque addressed to the ‘Income Tax Department’.
The bank would accept the money and challan and provide a voucher.

FAQs

Is everyone required to pay the self-assessment tax?

Self-assessment tax must be paid by individuals for income from other sources. Self-employed people must pay the self-assessment tax if they have not considered a portion of their income when making the final payment or the TDS may not have been deducted.

Should the self-assessment tax be filed on a particular date?

The self-assessment tax must be paid before filing the income tax returns.

What is the difference between self-assessment tax and advance tax?

Advance tax is the part of one’s annual tax liability paid in advance, while self-assessment tax is the amount a taxpayer is liable to pay on their assessed income after deducting the TDS and advance tax.