You have to pay Self-Assessment Tax (SAT) for your income from other sources. There are no special criteria for the date of payment. The tax can be paid online through a few simple steps and it can also be calculated with a simple procedure. You are expected to compute the final liability of income tax after deducting the TDS amount from the source of income as well as the advance tax payable for the financial year.
When the financial year is almost over, if there is any tax pending before filing your income tax return, a final amount that you are liable for is known as the self-assessment tax. It is the final calculation before filing the tax return. This is also known as SAT. There is no specification on date of payment of this tax. The ideal time is to pay it as soon as possible for you, without waiting for the tax returns filing date, as a way to avoid of interest on the tax amount.
Key Takeaways
- SAT (Self-Assessment Tax) is generally payable by an individual related to income from other sources.
- It is necessary to pay the taxes due in full, in order for the return filing process to be complete.
- SAT is a balance that an assesses has to pay on the income that has been assessed.
- There are many ways in which tax collected by the government by way of advance tax, tax deducted at source, etc. SAT is another way of collecting income tax by the government.
- The taxpayers have to quote the assessment year in all the income tax filing and self-assessment tax payments.
What Exactly is Self-Assessment Tax?
Self-Assessment Tax (SAT) means the tax obligation of a taxpayer after considering tax deducted at source and advance tax. SAT is paid during the assessment year before the income tax returns are filed by submitting Challan 280. Facility to pay self assessment tax online is known as E-payment facility where SAT facilitates a taxpayer to make the payment online. In order to make online payment, the taxpayer must have a net-banking facility on their bank account.
Did You Know?
The amount of self-assessment tax payable is finalized after considering the TDS and advance tax credits available to the taxpayers. The taxpayer can check these credits by scrutinizing Form 26AS.
Who Can Pay Self-Assessment Tax?
SAT (Self-Assessment Tax) is the tax that is paid by the assesses in a case where their tax liability is greater than the sum of advance tax or tax deducted at source. This can happen because of several reasons such as additional income earned during the year, or deduction of tax at a lower rate as compared to the slab rate applicable to the assesses. If an assesses files their return without paying the SAT, it will be considered as an invalid return.
In order to save the interest payable on the tax and non-compliance with the tax laws, it is really crucial to pay the tax on time. The payment of tax can be made by filing the tax challan form ITNS 280 either online or at the bank.
How to Calculate Self-Assessment Tax?
The Self-Assessment Tax can be computed and paid by the taxpayers on their own. Here is how the taxpayers can calculate the SAT (Self-Assessment Tax).
Consider,
a = Tax on total income as per the applicable slab rate
b = Tax deducted at source
c = Advance tax
d = Relief under section 90/90A/91
xx = a-b-c-d
Following is the formula to calculate the SAT
SAT to be paid = xx + Interest under section 234A/234B/234C
How to Pay Self-Assessment Tax Online?
The taxpayers can make the tax payment online or offline at the sanctioned banks. Here are the steps to pay self-assessment tax online.
- The taxpayer can log on to the income tax website, www.incometaxindia.gov.in
- Once the sign in is done, an option “e-Pay taxes” will be visible.
- After clicking on this link, the taxpayer will be redirected to the National Securities Depository website.
- In that website, select “challan no./ITNS 280” followed by “(0021) Income tax (other than companies)”.
- The taxpayer then needs to fill in the details such as PAN card details, name, contact details, residential address, and official contact number and email address.
- After filling the details, the taxpayer needs to choose the appropriate year for assessment that he or she will be making the payment for.
- Select the type of payment, which in this case will be “(300) Self-Assessment Tax”.
- The taxpayer can then choose the bank of their choice to make the payment and select the tax payable amount. It will redirect to the bank’s own Net banking page to make the payment.
- Once the payment is successfully done, a challan will be displayed. This challan will include CIN, all the details of payment and the bank’s name with which the payment has been made.
- It is always advisable to keep a copy of the same.
- After the SAT is paid, it reflects on the taxpayer’s Form 26AS within a few days. If it does not show, the challan details can be filled in when filing the income ta return.
How to Pay Self-Assessment Tax Offline?
The taxpayers also have the opportunity to pay self-assessment tax offline by visiting their bank branch. They can follow below steps to make their return offline.
- Visit the bank branch and request for the relevant tax payment challan form, in this case, Challan 280.
- Add the details as required in the form and present the filled-in Challan 280 form simultaneously with the money. The taxpayer can make a tax refund either cheque or cash. If the taxpayer chooses to make the payment via cheque, they have to name the cheque in courtesy of “Income Tax Department”.
- Bank will accept the money and challan from the taxpayer and give them a voucher by cutting a part of challan.
Once the taxpayer has paid the tax, they must save the slips as evidence of payment. Within ten days, the income tax payment should display in the taxpayer’s Form 26AS as Self-assessment tax.
How to Check Pay Self-Assessment Tax Payment Status?
In order to check the self-assessment tax online status, the below steps need to be completed.
- Log on to “e-Filing” portal of income tax. (www.incometax.gov.in)
- Go to “My Account” menu and click the “View Form 26AS (Tax Credited)” link.
- Read the disclaimer carefully, and click “Confirm”. After clicking, the user will be redirected to TDS-CPC Portal.
- In the TDS-CPC Portal, agree on the acceptance of usage and Click “Proceed”.
- Click on “View Tax Credit (Form 26AS)”.
- Select the assessment year and view type (HTML, PDF or Text).
- Then click on “View / Download).
- The taxpayers can view the tax deducted by their employer or any other third party under different sections.
Word to Remember
Form 26AS
Form 26AS is a tax passbook which contains details of taxes deposited and deducted during the financial year. It is eventually replaced by the AIS (Annual Information Statement). It also shows the assesses along with self-assessment tax return. This information is specific to a PAN (Permanent Account Number).
Conclusion
All taxpayers should take all types of income tax assessment seriously. It is crucial to understand how you can pay self-assessment tax online or offline. The interest can be estimated by the taxpayers by including the amount of advance tax which has not been returned. The income tax return cannot be submitted to the income tax department till the time the taxes have been paid.
Frequently Asked Questions (FAQs)
Self-Assessment is a system which is used to collect Income Tax. The tax is normally deducted automatically from wages, savings or pension. People who have other income should report for self-assessment tax return.
The self-assessment tax is required to be paid before filing the income tax return. If you fail to do that, the return will be defective and the same will not be processed by the department.
If you have never filed in a self-assessment tax return before, then it may look daunting. But when you clearly understand the process, it is relatively simple as long as you have all the information you need.
The self-assessment is not really a tax, it is a way of paying tax. The objective of self-assessment is that you are responsible for completing a tax return each year if you have other income and paying for any tax due for that tax year.
Read more about Tax Assessment Year.
