Self Assessment Tax: Procedure for Payment and Computation

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As the name suggests, Self Assessment Tax is the tax which is computed by the taxpayer on his own and then deposited with the govt. The Self Assessment Tax shall be paid before the filing of income tax returns.

The Self Assessment Tax to be paid shall be accompanied by Challan No. / ITNS 280. This tax can be paid at any of the authorised banks or can even be paid online.

self-assessment-tax

The details of tax paid, the date on which it has been paid and the Challan No. are required to be mentioned in the Income tax Return

Computation of Self Assessment Tax

The procedure for computing the self assessment tax has been explained in the following steps:-

Compute Tax payable on Total Income as per Income Tax Slabs a
(Add) Interest under Section 234A/ 234B/ 234C b
(Less) Relief under Section 90/90A/91 c
(Less) MAT Credit under Section 115JAA d
(Less) TDS/ TCS e
(Less) Advance Tax f
Self Assessment Tax to be paid a+b+c-d-e-f

*Interest under Section 234A if for late filing of Income Tax Returns and Interest under Section 234B/ Section 234C is for delay in payment of Advance Tax.

Self Assessment Tax not paid in full

In case the Self Assessment Tax is not in full, the amount so paid by the tax payer shall first be adjusted towards the interest payable and the balance towards tax. This can be explained with the help of the following example:

Income tax including Surcharge as per Income Tax Return 1,00,000
(Add) Interest under Section 234A/ 234B/ 234C 40,000
(Less) TDS and Advance Tax -45,000
Self Assessment Tax to be paid under Section 140A 95,000
Amount paid as Self Assessment Tax 60,000

 

The amount paid of Rs. 60,000 shall be apportioned as under:-

  • Rs. 40,000 as Interest under Section 234A/ 234B/ 234C and
  • Rs. 20,000 towards Income Tax

A Personal Finance enthusiast, Karan is the founder of charteredclub.com and loves to discuss about Money related matters.