Self Assessment Tax (SAT) – Meaning and Computation
Self-Assessment Tax: A Complete Guide
What is self-assessment tax?
The self-assessment Tax (SAT) is the amount remaining after you have deducted your income taxes and any taxes already paid, such as Tax withheld from your wages (TDS). You must pay a SAT to file your income tax return (ITR). If you fail to pay the entire amount of SAT , your ITR will be invalid, and you may face Interest and penalties.
You don’t have to pay SAT on a specific date, but it’s best to pay it as soon as possible after calculating your tax liability. This will help you avoid penalties and ensure your ITR is processed smoothly.
Calculation of SAT
A= Your total payable tax
B= Interest to be paid as per section 234A / 234B / 234C (In case of a delayed filing of returns or remittance of advance Tax)
C= Relief on tax amount under Section 90/90A/91
D= MAT Credit amount under Section 115JAA
F= Advance Tax
Payable SAT calculation.
So, The total Self-Assessment Tax you have to pay = (A+B)-(C+D+E+F)
Income Tax including surcharge – 1,00,000
(Add) Interest under Section 234A/B/C – 40,000
(Less) TDS and Advance Tax – 45,000
Self-Assessment Tax that has to be paid under Section 140A – 95,000
Amount paid as SAT – 60,000
Payment process for the SAT
Here are the steps on how to pay SAT online via net banking:
- Go to the income tax website www.incometaxindia.gov.in: https://www.incometaxindia.gov.in/ and log in.
- Click on the e-Pay taxes option.
- You will be redirected to the National Securities Depository Ltd. (NSDL) website.
- Select the Challan no./ITNS 280 tab and then the (0021) Income tax (other than companies) option.
- Enter your PAN card number, name, and contact details.
- Choose the applicable assessment year for which you are making the payment.
- Select the type of payment as (300) Self Assessment Tax.
- Choose the bank through which you want to make the payment.
- Enter the Tax payable amount.
- You will be redirected to the bank’s net banking page to make the payment.
- Make the payment and save a soft copy or print a hard copy of the Challan for your records.
The Challan should reflect on your Form 26AS in a few days. If it doesn’t reflect, you can fill in the challan details while filing your ITR.
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A. Is it possible to avoid paying penal Interest if the self-assessment Tax is partially paid?
Ans. That is not the case. Even if you have paid in part and your SAT due is less than 1 lakh, you must still pay the late payment penalty.
B. Is it possible to pay self-assessment Tax in instalments?
Ans. The government allows you to pay SAT in instalments. You do not have to pay the entire amount in one go. However, you must complete the payment before filing your income tax return (ITR).
C. What exactly is Form 26AS?
Ans. Form 26AS is a document that shows all the taxes you paid during the year. You can use it to check if your taxes were credited correctly and to claim tax credits when you file your income tax return.