Self-Assessment Tax

Self-Assessment Tax is the tax paid by a taxpayer before filing the Income Tax Return (ITR) to settle any remaining tax liability after considering TDS, advance tax, and other credits.

It ensures that the total tax payable for the financial year is fully discharged.

1. When is Self-Assessment Tax Payable

Self-assessment tax is required when:

• Total tax liability exceeds:
  • TDS (Tax Deducted at Source)
  • Advance tax paid
• There is a shortfall in tax payment

It must be paid before filing the ITR.

2. How It is Calculated

Self-assessment tax is computed as:

$\text{Self-Assessment Tax}=\text{Total Tax Liability}-(\text{TDS}+\text{Advance Tax})$

(Add interest and other dues, if applicable)

3. Mode of Payment

• Paid using Challan 280
• Can be paid online via net banking or offline at authorised banks

4. Importance of Self-Assessment Tax

• Mandatory before filing ITR if tax is payable
• Ensures accurate and complete tax compliance
• Prevents interest and penalties

5. Interest Implications

• Delay in payment may attract:
  • Interest under Section 234A, 234B, and 234C
• Interest must also be paid along with tax

6. Reflection in Records

• Payment is reflected in Form 26AS and AIS
• Must be correctly reported in ITR

7. Common Mistakes

• Filing ITR without paying full tax
• Ignoring interest liability
• Selecting wrong assessment year in challan
• Not verifying payment reflection

Practical Insight

Most people think filing ITR completes compliance.

It doesn’t.

If tax is still payable:
👉 return is not complete until you pay it

The correct sequence is:

1. Calculate tax
2. Pay balance
3. File return

How N D Savla & Associates Can Help

At N D Savla & Associates, we help you:

• Accurately compute tax liability
• Ensure correct payment via Challan 280
• Calculate and include interest properly
• File error-free ITR