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Before filing the ITR one has to make sure that one owes no tax . If after calculating the income, taking care of deductions and deducting the tax already paid (TDS) one realises that one has paid less tax than due then one has to pay the balance tax. This tax is called Self Assessment Tax. One has to calculate the self assessment tax, pay the Self Assessment tax using Challan 280,update the ITR and then submit it. This article explains Self Assessment Tax in detail.

Self Assessment Tax

What is Self Assessment Tax

While filing income tax returns, one does a computation of income and taxes to be filed in the returns. Sometimes, the tax paid either as advance tax or by way of TDS is less than the actual tax payable . The shortfall of tax,which we owe,  is called the Self assessment tax. This needs to be paid before Income Tax Returns are filed.

How can one pay less tax than due? Give examples of where one has paid less tax than due?

Interest from FD, Interest from Saving Bank account, short term capital gains are often the cases where a salaried person ends up not paying the tax due. Note if tax due in the financial year is more than 10,000 Rs you need to pay Advance tax else pay penalty under section 234B, 234C while filing ITR.

Less tax paid on Fixed Deposit

Say you invested in Fixed Deposit . Interest from FD is taxable as per your income slab. If interest on FD in a financial year is less than 10,000 Rs no TDS is deducted. if interest on FD is more than 10,000 interest is deducted at 10%. You have to pay tax on interest , even if you get interest at end of fixed deposit tenure.

Say you have earned interest of 11,535 of FD in the financial year (without TDS deduction) , TDS , at 10% of Rs 11535 i.e 1153.5,  has been deducted then 11,535 is your income from other sources and 1153.5 should be claimed in TDS. So  if you are in 20% slab(for FY 2015-16 income is more than 5 lakh) or 30% tax slab (for FY 2015-16 income is more than 10 lakh) then you owe tax and you need to pay 1153.5 or 2307 as tax.

Interest on Saving Bank Account more than 10,000

Interest earned on Saving Account is considered as Income from other Sources. This needs to be declared in your income tax returns. No TDS is deducted from the interest on Saving Bank Account. Before 1st Apr 2012, it was taxed based on your income slabs.

From FY 2012-13 under the new section 80 TTA of the Income-tax Act, a deduction up to an extent of Rs 10,00 in interest from all the bank accounts is allowed to an individual or Hindu undivided family, Interest over Rs 10,000 is taxed as per tax slabs. So if you have earned say Rs 14,000 on all your Saving Bank Accounts together. 10,000 Rs is tax free but you need to pay tax on remaining 4000 .  So you need to pay tax of Rs 400 at 10%, rs 800 at 20% and 1200 at 30%.

Interest on Saving Bank Account : Tax, 80TTA discusses it in detail.

How to find out that you have paid less tax or you need to pay Self Assessment Tax?

After entering ALL your other Tax details when you calculate your Tax Liability, for example in ITR1 Excel Click on tab Income Details. Click on Calculate Tax to calculate the tax that you should be paying for the income and deductions you have declared as shown in the picture below

Calculate Tax in ITR excel

Calculate Tax in ITR excel

If you have paid less tax, it would show the difference in the Balance tax payable row of Income Tax Details as shown below. To recall from  Fill Excel ITR form : Personal Information,Filing Status : White cells with blue labels indicate auto calculating fields which should not be filled. These are calculated automatically based on information entered in other cells.

Balance Tax Payable in Income Details of ITR Excel

Balance Tax Payable in Income Details of ITR Excel

It would also show up in the rows 15-18 of tab Taxes Paid and Verification.  If you have paid more tax, it would show the amount in the tax refund row 18 of tab Taxes Paid and Verification

Total Tax payable or Refund in ITR in Excel

Total Tax payable or Refund in ITR in Excel

If the tax is payable then you need to Pay Self Assessment tax using Challan 280, explained later in the article.

What if an individual fails to pay Self Assessment Tax?

Income Tax Returns can be filed only if we have paid the Tax due to the government. If you submit the ITR without paying then your Income Tax Return can be declared Defective. Our article Defective return notice under section 139(9) talks about in detail.

Further, non-payment of Tax is a criminal offence and the individual is liable to be penalized & punished under the court of law. Moreover, Interest will get added to your tax liability till the date of payment of tax.

When should the Self Assessment Tax be paid?

There are no specific dates to pay Self Assessment Tax.  But it has to paid before one submits ITR. Non payment of Self Assessment Tax and non filing of the returns within the due date of filing i.e., 31st July will fetch Interest under section 234.

Paying Self Assessment Tax Using Challan 280

What is the procedure for paying Self Assessment Tax?

When one needs to pay tax , Advance Tax, Self Assessment or Regular Assessment tax,Tax Payment Challan, ITNS 280 Challan is used to pay Income Tax due, if any.

Online Mode of Payment of Self Assessment Tax
One could pay Self Assessment Tax Online through the NSDL website,at https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jspOnline Payment is allowed only by Net Banking & not by Credit/ Debit cards. You can pay anyone’s Tax using Challan 280 through your net banking.

  • Select Challan No./ITNS 280(Payment of Income Tax & Corporation Tax)
  • Select Tax Applicable as (0021 – Income Tax – Other than Companies)
  • Select Assessment Year . Please be very careful in selecting Assessment Year. For filing ITR before 31 Dec 2020 for income earned between 1 Apr 2019 to 31 Mar 2020  FY is 2019-20 and AY is 2020-21 .  Selection of wrong Assessment Year while paying tax will result in demand for the amount of tax to be paid for that respective year. It can be corrected through Challan Rectification Process but It is a lon…g process.
  • Then select the type of payment as (300) Self Assessment Tax, and fill rest details. (You don’ t have to fill Name. It will be filled based on PAN and address entered.)
  • Select the correct assessment year
  • Fill in the form and click “Proceed”
  • Fill in the Tax Details
  • Enter the Tax payable amount
  • Confirm & Proceed
Paying Self Assessment Tax online using Challan 280

Paying Self Assessment Tax online using Challan 280

You need to break up the tax payable into its components, i.e. “Income Tax” and “Education Cess” etc as shown in the picture below. The terminology used for paying Self assessment tax is given below.

Paying advance tax and self assessment tax by Challan 280

Paying advance tax and self assessment tax by Challan 280

If you are confused about the breakup just pay total amount as Basic Tax. Income Tax Department checks that total amount has been paid or not.

  • Basic tax is tax payable without any cess, interest etc.
  • Surcharge :
    •  Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
    • Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
  • Penalty:  Not applicable for Self Assessment or Advance Tax. It is applicable only if assessment order is passed and you receive a notice from Income Tax Dept.
  • Education cess. : is 3% of the Basic tax.
  • Interest: If one has to fill interest for late payment of advance tax and self assessment tax 234B,234C or any other interest . Then it has to be mentioned here.
  • Others: Which does not fit into any of the above categories. Fill in as 0

After the taxes are paid through Challan 280, you will get a receipt or counterfoil as the acknowledgement for the taxes paid. The receipt has details of the person paying the tax, amount, type of payment etc and Challan Identification Number (CIN) as shown in the receipt of e-payment of Income Tax below. The challan identification number has to be cited in the return of income as of tax payment. CIN can also be cited in any further queries about the tax payment.  CIN comprises of the following :

  • Seven digit BSR code of the bank branch where tax is deposited
  • Date of Deposit (DD/MM/Year) of tax
  • Serial Number of Challan
  • Example of CIN: 0000762 020208 32
Self Assessment receipt

Self Assessment receipt

Show Self Assessment Tax in ITR

After paying income tax through Challan 280 what next? Is your responsibility over. No. You need to show the tax paid in your ITR, If you have paid Self Assessment tax through Challan 280 fill in the details in Tax paid and make sure that your tax liability is 0 before submitting the return as explained for ITR1 in our article Fill Excel ITR1 Form : Income, TDS, Advance Tax and shown in image below. (Note below image is for Advance Tax. But details to fill Self Assessment Tax are same)

In the new ITR Utility, go to the section called Verify your Tax details, Taxes Paid as shown in the image below

Verify your Tax Details on the New Website

Verify your Tax Details on the New Website

Click on the Advance Tax and Self Assessment Tax as shown in the image below

Verify the Taxes paid TDS, Self Assessment etc

Verify the Taxes paid TDS, Self Assessment etc

Below Do you want to add more Taxes, Click on Add Another and fill in the Tax Details and Click Add

Check Advance and Self Assessment Tax in new ITR

Add details of Advance and Self Assessment Tax

Verify Self Assessment Tax in Form 26AS

Part C of Form 26AS has details of Tax Paid (other than TDS or TCS). If you have paid Advance Tax or Self Assessment Tax it will appear in this section.  Please verify that advance tax or self assessment tax details are showing up in Form 26AS, If they don’t match with your details please contact the Bank.

Normally It takes 3/4 days from the day you pay tax. If Sunday then around 5 days .

Self Assessment Tax in form 26AS

Self Assessment Tax in form 26AS

YouTube Video on Self Assessment Tax

This 5 minute video gives details about Self Assessment Tax

Related Articles:

List of all articles related to Income tax have been collected at Understand Income Tax, Fill ITR,Income Tax Notice

Hope the article helped you understand Self Assessment Tax. Why one has to pay Self Assessment Tax,how to calculate the self assessment tax, pay the Self Assessment tax,update the ITR and then submit it. Please leave your comments and questions below.

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