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What is Self Assessment Tax and how to pay it online?

what is self assessment tax
September 15, 2023


What is Self Assessment Tax and how to pay it online?

While we may have heard of some terms around taxation, we may still not know their real purpose or the meaning behind them. One of them is the Self Assessment tax. For the unversed, this is the amount that one gets after deducting the Advance Tax and TDS on the income for a given financial year. It is important to remember that those who are liable to file their income tax returns must be responsible enough to pay Self Assessment Tax beforehand.

Is there a deadline for this? Not really. It is generally calculated at the end of every financial year. The only condition is to pay this tax before filing income tax returns. If one doesn’t abide by the rules, there will be interest levied on the tax amount.

Does everyone have to pay a Self Assessment Tax?

The answer is NO.  

Self Assessment tax is generally paid by those who have accidentally not taken into account a certain income, while paying advance tax. There could also be instances when this tax is levied on account of incorrect calculation of TDS.

In certain cases, it is mandatory for an individual to pay Self Assessment Tax, if they invest in fixed deposits and other channels through which they have earned additional income that is unknown to their employer.

How can one calculate Self Assessment Tax?

Calculating the Self Assessment tax can be done in a few easy steps. Here they are:

1. Make a list of all your income sources, be it your salary, earnings through business, capital gains or anything else. Add everything to arrive at the total income.

2. Take into account all the tax deductions and exemptions that fall under Section 80C, 80D or other clauses of the Income Tax Act.

3. Calculate the tax on the number you arrive at, based on the tax slabs for the given year

4. This is the amount you need to pay.

Here’s a formula that can be used to calculate it:

[(B+C) – (D+E+F+G)]

B = Total amount of tax that needs to be paid
C = Interest to be paid under Section 234A/234B/234C
D= Deductions on the tax payable under Section 90/90A/91
E= MAT Credit under Section 115JAA
F= TDS/TCS amount
G= Advance Tax

Disclaimer: A part of the component C or the interest that is mentioned under Section 234A is only included, in case someone files their income tax returns past the due date. Furthermore, the interest under Section 234B/234C is only paid if Advance Tax isn’t paid on time.

How can you pay the Self Assessment tax online?

This is again a simple procedure:

1. Head to the official website of the Income Tax Department in India. Next, log into your account.

2. Once done, click on the e-File section and go to the e-Pay Tax option.

3. Click on the new payment option.

4. Choose Income Tax from the given options and click on Proceed.

5. Pick the right Assessment Year and choose Self Assessment tax that is ITNS 280

6. Enter the correct tax amount to move to the payment.

7. Select your bank to make your payment. You also have to choose the payment mode that’s most convenient for you.

8. Once you complete the payment, you can download the Challan by clicking on the option for it.

Now that you know all about Self Assessment tax, follow these steps in case you need to pay it and get this task sorted without any worry! 

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ARN - INT/ED/08/23/4137

#Tax assessments are subject to provisions of the Income Tax Act, 1961. Tax Laws are subject to change from time to time.

#The customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law