What is self assessment tax?

The question,“What is self-assessment tax” has been answered in detail in this blog. It is extremely important to understand what is self-assessment tax or SAT, because first of all, taxes are an unavoidable entity. You have to pay taxes no matter what. Every individual is required to be updated with financial knowledge, especially related to taxes to attain financial stability and minimize tax liabilities. It must be noted that taxpayers who need to fill out their Income Tax Return or ITR have to pay this tax before filing the return.

To understand what is self-assessment tax, one must be aware that there are three ways in which the government collects taxes from you:

• 1. TDS (Tax Deducted at Source)
• 2. Advance Tax
• 3. Self Assessment Tax

What is self-assessment tax?

Meaning: Self Assessment Tax (SAT) is the amount that a taxpayer has to pay on their income after deducting TDS(Tax Deducted at Source) and Advance Tax in that particular financial year. In simpler words, when you pay taxes, the TDS and Advance Tax you paid during the financial year, gets deducted from the final payable tax. If the paid amount is not enough, the remaining balance will be required to be paid by you to cover the difference. This difference is called the Self Assessment Tax (SAT). Self Assessment Tax needs to be paid when the TDS and/or Advance Tax is lower than your tax liability. In such cases, the Self Assessment Tax covers the difference.

But why does such a difference arise? There could be several reasons behind this. Some of them are listed below:

• 1. The amount that you may have deducted in the form of TDS was not accurate
• 2. In case you forgot to consider any of your income while paying the advance tax
• 3. If income earned from investments is high which the employer does not account for, such a situation of difference may arise.

Who is required to pay Self Assessment Tax?

Generally speaking, Self Assessment Tax is payable by a taxpayer who is related to income from other sources as well.

How to Calculate Self-Assessment Tax

Now that we have answers to the question, “What is self-assessment tax”, let's move forward and see how to calculate self-assessment tax.

Given below are the steps to calculate self-assessment tax

• 1. The first step would be to enumerate your income from all the sources. This will include your salary as well as the other capital gains obtained.
• 2. Secondly, you would be required to take into account tax exemptions and deductions as offered by Section 80C of the Income Tax Act, Section 80D of the Income Tax Act, and so on (these apply only if you file under the old tax regime).
• 3. Following the Income slab you fall under, calculate the total payable tax on your income.

Using the formula given below, calculate the Self Assessment Tax (SAT).

It must be noted that the SAT can be calculated using an online calculator as well. This will help provide accurate results in no time.

How to pay Self Assessment Tax Online?

Paying for the SAT online is a hassle-free job. Follow the steps below to pay SAT online.

• 1. On any web browser, open the income tax e-filing portal
• 2. Login by entering your login credentials
• 3. Locate the e-File tab on the screen and tap 'e-pay Tax
• 4. Tap on New Payment
• 5. Choose the Income Tax option
• 6. Tap on Proceed
• 7. Select the Assessment year and self-assessment tax (300)
• 8. Tap on Continue
• 9. Type the tax amounts
• 10. Tap on Continue
• 11. Pay through your desired method
• 12. Tap on Download to download the Challan after the payment is completed

How to pay Self Assessment Tax Offline?

Follow the steps below to pay your SAT offline.

• 1. On your web browser, open the Income tax official website and go to e-Pay Tax.
• 2. Choose Self-Assessment Tax (300) for the right assessment year and enter the tax amounts
• 3. Select 'Pay at Bank Counter' and the authorised bank where you will pay, and generate the challan (CRN)
• 4. Take a printout of the challan
• 5. Go to a branch of that bank within 15 days, the validity of the challan. Manually filled challans are no longer accepted
• 6. Make payment through cash (up to ₹10,000 per challan), cheque or demand draft
• 7. Collect the receipt of the challan after the payment is completed

What will happen if you fail to pay Self Assessment Tax?

If you fail to pay the Self Assessment Tax, there obviously will be consequences. Listed below are the consequences that might take place in the case of non-payment of Self Assessment Tax.

There might be penal consequences like-

• 1. The Income Tax Return or the ITR you filed will be considered defective, as you are supposed to pay the self-assessment tax beforehand to file the ITR.
• 2. You might be imposed with late fees and penalties
• 3. You will be liable to higher interests

What is the Due Date to pay the assessment tax?

As such, there is no particular due date to pay the Self-Assessment Tax. However, you are required to pay it before filing your return, otherwise you may receive a notice of intimation from the Income tax department. Along with that, you might be imposed with consequences such as penalties and late fees.

The article aimed at providing you with all the information regarding the Self Assessment Tax, including its meaning, who has to pay it, how to calculate the Self Assessment Tax, how to pay online, how to pay offline, and the consequences that you may need to face in case of non-payment of SAT. For more financial awareness, visit PensionBox.

Frequently asked questions

What is Self Assessment Tax?

Self Assessment Tax (SAT) is the amount that a taxpayer has to pay on their income after deducting TDS(Tax Deducted at Source) and Advance Tax in that particular financial year.

Can I pay the SAT online?

Yes, you can pay SAT online by visiting the Income Tax e-filing portal.