written by | April 28, 2022

Everything You Need to Know About Self Assessment Tax

As the citizens of our country, we have to bear and fulfil certain responsibilities, one of which is the timely payment of taxes. Every person is expected to pay tax on their income, and the Government of India may collect these taxes through Self Assessment Tax (SAT) and other taxes such as the advance tax and the TDS/TCS.

This article will take you on a journey of exploring the Self Assessment Tax, along with the answers to some potential questions like why might you need to pay it? How to calculate it? And of course - how to pay for it?

Did you know?

According to the 2021-22 Union Budget, the gross tax revenue of the Indian government is estimated to be Rs. 22,17,029 crores.

What Is Self Assessment Tax?

The Self Assessment Tax may be described as one of the taxes collected by the government of India that a citizen needs to pay for their income from other sources. A Self Assessment Tax is any balance tax to be financed by an assessee on the assessed income at the end of the financial year after evaluating one’s total taxable income, the paid taxes, and the reduction of deductions. 

In layman’s terms, it can be defined as a person's tax liability that stays unresolved until the year’s end, even after TDS payment. Though there is no specific deadline mentioned for the payment of this tax, it is always ideal to pay it at the earliest. Only after this payment is one eligible to file a valid Income Tax return. Failure to pay this tax may lead to the penalty of interest rates on the tax amounts and other consequences.

Self Assessment Tax: Why Would You Pay It?

An individual may be liable to pay off Self Assessment Tax at the end of a financial year based on the following grounds.

  • The tax liability is larger than the sum of the total taxes paid and deducted.
  • It can occur if a person earns additional income in the financial year, like earnings from investments, fixed deposits, or short-term bonds.
  • Another reason may be the deduction of taxes at rates lower than the slab rates pertinent to the assessee.
  • The TDS may not have been deducted or may have been removed partially.
  • Increased tax liability will, in turn, lead to a rise in the tax outflow of the individual.

The neglect in payment of this tax may result in an unsuccessful filing of the Income Tax returns at the end of the year. It may subject the individual to heavy penalties like the government imposing interest rates on the tax amount and other repercussions.

Also Read: All You Need To Know About Section 143(1) of Income Tax Act

Calculation of Self Assessment Tax

As stated in the definition, the SAT is the pending liable amount after considering the individual's taxable income, the paid taxes, and other deductions. We need to subtract tax credits like TDS, advance tax, TCS, MAT/AMT, credit, and relief mentioned under sections 87A, 90, 90A, and 91. The individual must foot the tax and interest payable under sections 234A, 234B & 234C.  

For calculating your Self Assessment Tax, one may follow the steps mentioned below:

  1. Calculate the total income of the individual.
  2. Calculate the total tax payable on the income as per the applicable slab rates.
  3. Add the amounts of interests disclosed under sections 234A, 234B, and 234C.
  4. Deduct the Relief introduced under sections 90, 90A and 91.
  5. Subtract the amount of Tax Deducted at Source (TDS)/Tax Collected at Source (TCS).
  6. Deduct the amount of Advance Tax paid.
  7. Subtract the amount of MAT credit covered by section 115JAA.
  8. The final amount at the end is the amount of SAT to be paid.

Partially Paid Self Assessment Tax

In the scenario of partly paid SAT, the amount of tax applicable to the assessee has to be initially modified towards the payable interest and levelled towards the tax. The following sample may assist us in understanding this concept better.

Income Tax

₹2,00,000.

The interest mentioned in sections 234A, 234B & 234C (to be included).

₹30,000.

Tax Deducted at Source (TDS) & Advance Tax (to be deducted).

₹50,000.

SAT is to be paid according to section 140A.

₹1,80,000.

Amount billed as SAT.

₹70,000.

Calculation of Interest for SAT

In case the payment of SAT is being made before the evaluation date, and you can figure out the interest through the following methods:

  • The value of the advance tax yet to be paid is taken for computing the interest for the date till the payment of the SAT. 
  • The SAT has to be deducted from the amount of advance tax, considered for calculation from the time of payment of SAT.

Payment of Self Assessment Tax

The individual may opt to pay the SAT either online through the official website of the Indian Income Tax Department or manually by visiting the sanctioned banks. The steps to be noted for virtual payment are listed as follows:

Step 1: Log in to the official Income Tax Department website, https://www.incometax.gov.in.

Step 2: Sign in on the site and hit the option for e-Pay taxes.

Step 3: After this, you will be redirected to the official site of the National Securities Depository Ltd. (NDSL).

Step 4: Now, you have to click on the ‘Challan No./ITNS 280’ tab followed by ‘(0021) Income Tax (other than companies)’.

Step 5: The taxpayer now has to fill in the credentials such as Pan Card details, Name, Contact specifics, including mobile number and residence details.

Step 6: Select the apt financial year of assessment you are paying tax for.

Step 7: Now click on the ‘Type of Payment’ and opt for ‘(300)’, which is the code for Self Assessment Tax.

Step 8: After that, you may select your bank's name available in the drop-down list and proceed further by making the payment.

Step 9: Fill in the ‘Tax Payable Amount’

Step 10: You will be sent to your bank’s webpage for net banking to continue with the payment.

Step 11: After the successful settlement of the tax amount, inspect the challan presented on the screen for payment details like the transaction ID, the name of the bank, the paid amount, and the CIN.

Step 12: Save a copy of this challan for future reference.

Step 13: These details will also be displayed on the taxpayer’s Form 26AS after the successful payment of the SAT.

Step 14: If the update is missing or the details are not shown, the individual may fill in the challan details while filing the Income Tax return.

Also Read: How To Generate Income Tax Return XML File

How to Check SAT Status in Form 26AS?

After a taxpayer has paid their taxes and wants to get a summary of the types and amount of Income-tax filed, they can refer to Form 26AS. The Form 26AS is a tax credit report that keeps a collage of the total revenue obtained by an individual as an assessee from various sources. It is a crucial document for a person filing their taxes. In the case of SAT, it can be utilised as a tax passbook to keep track of the taxes paid by the taxpayer.

  • Step 1: Visit the ‘e-filing’ portal of the Income Tax Department, https://www.incometax.gov.in/iec/foportal/
  • Step 2: Login by entering your User ID. You will have to provide your Aadhaar Card or PAN Card credentials to proceed with the login process.
  • Step 3: After logging in, click on ‘e-file’.
  • Step 4: Now choose ‘Income Tax returns’.
  • Step 5: After this, select ‘View Form 26AS’.
  • Step 6: After carefully reading the disclaimer, press ‘Confirm’ to continue.
  • Step 7: You will be redirected to the TDS-CPC portal. Here select ‘Proceed’.
  • Step 8: Now click on ‘View Tax Credit (Form 26AS)’.
  • Step 9: After this, choose the ‘Assessment Year’ and prefered ‘View Type’.
  • Step 10: Click on ‘View/Download’ to see the tax paid or deducted under multiple sections.

Conclusion

The Self Assessment Tax (SAT) is one of the various taxes charged by the government of India on the income of an individual. This tax is elucidated as the unresolved amenability for an individual taxpayer after the deductions and payments like the TDS/TCS, the advance tax, and others. The filing of this tax turns out to be essential for the dereliction may make way to worthy consequences. One can easily work out the amount of tax to be paid by performing basic arithmetic operations. It is possible to file the Self Assessment Tax in virtual and physical modes. After the payment of SAT, a person can easily check their tax filing status on Form 26AS.

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FAQs

Q: Where can I check the status of my challan?

Ans:

After paying the Self Assessment Tax, or any other tax, the taxpayer may verify its status on the portal of TIN-NSDL as stated below:

  • Visit the TIN-NSDL Portal.
  • Click on ‘Services’ and select ‘Challan Status Inquiry’.
  • The taxpayer will be redirected to a new web page. Here choose ‘CIN based view’, available below the title, ‘For Taxpayers’.
  • After that, complete the input details of the challan.

Fill out the captcha and click on show.

Q: How can I pay for the SAT in physical mode?

Ans:

A taxpayer can pay the SAT physically by paying a visit to the nearest sanctioned bank branch and going through the following steps:

  • Visit the bank and request the Challan 280 (in case of the SAT).
  • Fill in the form with the required credentials.
  • Go to the designated bank’s table and hand over the duly filled Challan 280 and the money. The person may opt to make payment either through cheque or in cash.
  • The bank executive will then give the individual a voucher cut off from the challan, containing the aspects and details of payment with an official stamp impression.

Q: Is it possible that Form 26AS may not display the SAT details after tax payment?

Ans:

Yes, sometimes there are such mismatches and glitches in Form 26AS. In such cases, the person may manually fill in the details from the challan obtained after the payment of Self Assessment Tax.

Q: Can I file my Income Tax return without paying the Self Assessment Tax?

Ans:

No. For an individual to file a valid and successful income tax return, they must pay SAT beforehand. Since this tax includes all the pending liabilities of a taxpayer, it is a must to pay the Self Assessment Tax.

Q: What is SAT?

Ans:

Self Assessment Tax or SAT is a tax charged on the income of an individual citizen by the government of India after taking into accord the total taxable income, the TDS/TCS, and the advance tax and other deductions.

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