Self Assessment Tax is the amount of income tax that a taxpayer pays on their own, before filing the Income Tax Return (ITR), after considering any tax already deducted (like TDS or advance tax). In India, if your total tax liability is more than what has already been paid through TDS or advance tax during the financial year, you must pay the remaining balance as Self Assessment Tax.
This tax is calculated and paid voluntarily by the taxpayer before submitting the ITR under section 139. It ensures that all dues are cleared beforehand so that the return can be successfully filed and processed without delay. You can pay it online through the official income tax portal using the appropriate challan, typically Challan 280.
For small business owners, freelancers, salaried individuals with multiple incomes, or first-time taxpayers, paying Self Assessment Tax is a critical step in staying compliant with Indian tax laws. Not paying it before filing your ITR can lead to interest, penalties, or rejection of the return.
The process of calculating Self Assessment Tax involves summing up all your taxable income, subtracting applicable deductions, and accounting for any taxes already paid. If any amount is still due, that is your Self Assessment Tax.
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In short, Self Assessment Tax helps ensure you’ve paid your full tax dues for the year, making your ITR filing complete and compliant.