Self-Assessment Tax Payment: Calculation and How to Pay Self-Assessment Tax Online
- Bhavika Rajput
- 3 days ago
- 8 min read
Taxes are monetary fees that the government levies on individuals and organizations to raise money for public spending. Managing tax responsibilities is a vital duty for all Indian citizens. In 2024, there will be over 7 crore tax filers. Thus, knowing how to properly pay taxes is crucial. Tax Deducted at Source (TDS) or Tax Collected at Source (TCS), advance tax, and self-assessment tax are the three primary ways the government collects taxes. As a taxpayer, you need to be aware of the steps to calculate and pay self-assessment tax so you may finish your tax obligations with assurance.
Table of Contents
What is a Self-Assessment Tax?
Self-assessment tax is the amount of tax that a taxpayer owes at the end of the fiscal year after deducting advance tax and TDS/TCS. It simply implies that if, after deducting TDS/TCS and advance tax paid, it is discovered during the fiscal year that an individual has a tax liability, the additional tax liability must be paid to the government in the form of self-assessment tax. The amount a taxpayer pays at the end of the fiscal year, after subtracting advance tax and TDS/TCS, is known as self-assessment tax. This implies that a person must pay the government the additional tax known as self-assessment tax if they still owe money after deducting TDS/TCS and advance taxes paid throughout the fiscal year.
Need for Self-Assessment Tax
After learning the definition of self-assessment tax, one can ask why self-assessment tax is still required even after the taxpayer has fully paid the TDS and advance tax. Some of the factors that could result in self-assessment tax liabilities are listed below.
When calculating the amount of advance tax due, the taxpayer neglected to estimate a specific source of income.
Unexpected gains or income from other sources that were exempt from TDS were received by the taxpayer.
The TDS was either not deducted at all or was deducted at a rate that was less than what was necessary.
When a paid person changes employment, the present employer may not have taken the previous employer's wage into account.
Interest obligation resulting from underpayment, nonpayment, or postponement of advance tax payment
Calculation of Self-Assessment Tax
To compute self-assessment tax, follow these steps:
Add up all of your revenue, including your pay, occupation, business profits, capital gains, and other sources.
Subtract all of the permitted tax exemptions and deductions, including investments made under Sections 80C and 80D.
Determine the tax on the remaining amount using the slab rates' calculations. This represents your entire tax liability.
Next, use the following formula to calculate.
[(A+B) – (C+D+E+F)]
A = Total amount of tax due
B = Interest according to 234A, 234B, and 234C
E = TDS/TCS
F = Preliminary Tax
Note: Interest under Section 234A will be paid if income tax returns are filed after the due date; Section 234B/234C will only be paid if advance tax is paid after the due date.
How to Pay Self-Assessment Tax Online
Steps to Pay Self-Assessment Tax Without Logging in to the Portal
Step 1: Visit www.incometax.gov.in, the e-filing portal, and choose "e-Pay Tax" under "Quick Links."
Step 2: Click "Continue" after entering your PAN information and completing the OTP verification using your cellphone number.
Step 3: A success notification including your PAN and masked name will appear following OTP verification. To continue, click "Continue."
Step 4: From the "Income-tax" panel, choose "Proceed".
Step 5: Select "Self-Assessment - Tax (300)" as the AY and payment type (Minor head). Then click on "Continue."
Step 6: Click "Continue" after entering the correct tax payment information under the appropriate headings.
Step 7: Click "Continue" after choosing the payment method (Net Banking, Debit Card, or Payment Gateway) from the list of options under "Online Payment" on the "Select Payment Mode" page.
Step 8: Preview and check the information, then click "Pay Now" to pay the taxes or change the information if necessary. Then, check the information once more and click "Pay Now."
Step 9: Click "Submit to Bank" to proceed with the payment after checking the box and reviewing the terms and conditions. You will be taken to the appropriate webpage to finish the payment transaction based on the payment method you have chosen.
Step 10: The Challan Form (CRN) will be successfully generated after payment is finished. To finish the return filing procedure and for your records, download the Challan Form (CRN).
Steps to Pay Self-Assessment Tax After Logging in to the Portal
As an alternative, you can pay your taxes by going to your income tax portal and following the instructions below:
Step 1: Navigate to the Income Tax Department's e-filing portal's home page, click "Login," and then input your login information.
Step 2: Choose "e-Pay Tax" from the "e-File" menu on the Dashboard.
Step 3: On the "e-Pay Tax" screen, choose the New Payment option to initiate the online tax payment procedure.
Step 4: Select "Proceed" from the "Income-tax" window on the New Payment page.
Please proceed with the above-mentioned Steps 5 through 10 to finish your online tax payment.
Note: You will receive a confirmation email and SMS at the email address and mobile number linked to the e-Filing portal following a successful payment.
Consequences of Non-Payment of Self-Assessment Tax
There are major repercussions if you underpay or fail to pay your self-assessment tax:
Defective Return: If you fail to pay the income tax owed before filing your yearly income tax return, it may be declared defective.
Assessee-in-Default: You can be deemed an "assessee-in-default" if you don't pay your taxes, which could have an impact on your future compliance.
Interest Charges: Over time, interest on overdue income tax increases your tax return.
Fines: You may be subject to fines from the assessing officer, which would increase your total tax payment obligations.
Delayed Refunds: Your financial planning may be impacted if pending refunds are deducted from overdue taxes.
Effect on Credit Score: If you have unpaid taxes, your credit score may suffer, which could make it more difficult for you to obtain loans.
Check your liability with a tax deduction calculator. After that, pay online before the deadline using your self-assessment tax return login portal.
Consequences of Incorrect Self-Assessment
Making errors in your self-evaluation might result in a number of problems:
Inaccurate Return: It can be deemed defective if you don't pay the tax due before submitting your annual income tax return.
Rectification Period: Online self-assessment tax revisions are allowed for a grace period of 15 days.
Repercussions: If mistakes are not fixed, the return is faulty, which raises compliance concerns.
Possible Problems: Could affect financial credibility, raise scrutiny, and postpone reimbursements.
Effect on Future Filings: Tax authorities may watch your structure if you make the same mistakes in your online e-tax submissions.
Make sure all sources of revenue are included in your computations and double-check them to prevent these issues. Think about getting expert assistance if you have any questions about any part of your self-evaluation.
Difference between Self-Assessment Tax and Advance Tax
In accordance with the guidelines of the Income Tax Act of 1961, both SAT and Advance Tax are paid to the Income Tax Department of India. Both of them are distinct from one another, even though they are tax obligations paid to the Indian government.
Advance Tax
| Self-Assessment Tax
|
A part of the yearly tax liability paid in advance by a taxpayer. | Amount paid by an assessee on assessed income after deducting Advance Tax and TDS. |
Due date based on the amount of tax payable. | No due date associated with the payment, but it should be done before the income tax return filing date. |
Liability for both salaried employees and self-employed individuals with a tax liability exceeding Rs. 10,000 in a financial year. | Tax amount an individual is liable to pay in relation to their income from other sources. |
The amount payable for self-employed individuals and business owners is different from that of companies. | Calculated using a separate formula and does not differ as in the case of Advance Tax. |
Conclusion
Maintaining compliance in India requires knowing and controlling your self-assessment tax. Every action you take, from figuring out your tax burden to paying on time, counts towards avoiding fines and keeping a positive reputation with tax authorities. It is now simpler to do computations, fulfil deadlines, and stay out of trouble when using e-payment solutions. You may remain ahead of the game by routinely going over your tax records and keeping up with any changes to the law. To effectively handle the tax environment, keep yourself updated, get your paperwork ready, and comprehend the consequences of non-compliance.
Frequently Asked Questions
What are the different ways to pay Self-Assessment Tax online?
You can use net banking, credit cards, debit cards, or UPI through Challan 280 to pay self-assessment tax, either with or without entering into the Income Tax portal.
Is there a time limit to pay tax after a challan has been created?
Yes, you have 15 days to pay the taxes from the date the challan was created, which is also the date the CRN was generated.
Can I pay in cash? Is there any limit on cash transactions?
Yes. Cash transactions are allowed up to Rs. 10,000 per CRN.
Can I make my tax payments offline?
Yes, you have the option to pay your self-assessment taxes offline. You have two options for paying taxes offline: RTGS/NEFT or in person at authorised banks. However, you should be aware that to pay taxes using any of the methods—online or offline—you must create a Challan Reference Number (CRN) through the Income-tax Department's "e-Pay tax" feature on the e-filing portal. When paying at a bank counter, manual challans are not accepted. Please take note that both corporate taxpayers and non-corporate taxpayers to whom section 44AB tax audits apply must use the electronic payment method to pay their taxes.
What is the timing of E-Payment of taxes?
Debit cards or internet banking can be used to electronically deposit all direct taxes at any time (24/7).
What is the due date for payment self-assessment tax?
The self-assessment tax payment deadline is not set in stone. However, the income tax agency may issue you a notice or notification if you fail to pay it before submitting your return. You can also be asked to pay interest or a penalty.
What happens if I fail to pay Self-Assessment Tax on time?
A defective return, penalties, interest costs, delayed refunds, and even a negative impact on your credit score that makes it more difficult to obtain future loans might result from nonpayment or underpayment.
Can we avoid paying penalties and interest if we partially pay the self-assessment tax?
Defaulters (also known as "assess in default") are taxpayers who fail to pay all or a portion of the self-assessment tax. The income tax officer will assess how much of the penalty they are eligible to pay. But it will not be more than the taxes due.
Can I pay self-assessment tax in instalments?
Self-assessment tax can be paid in installments, yes. However, don't forget to pay in full before submitting your ITR.
What to do if the self-assessment tax is paid but not reflected in the prefilled details?
According to standard procedure, the agency receives information from several banks in 3–4 days. The Tax-returns/Pre-filled JSON contains it prefilled after that. The taxpayer has the option to wait the necessary amount of time for the information about taxes paid to automatically appear in their ITR. Alternatively, after selecting the "Add Details" link for Advance Tax and Self-assessment Tax Payment details under Schedule "Taxes Paid," the taxpayer can manually enter the payment details if they have already filled in extra information beyond the pre-populated information.
What are the common mistakes while paying Self-Assessment Tax?
A few pitfalls to avoid when paying self-assessment tax are listed below:
Entering the wrong payment year
Incorrectly selecting the advance tax or self-assessment tax payment type
Providing inaccurate PAN information when paying taxes without accessing the income tax e-filing portal
Not verifying the challan information twice before paying taxes
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