What is Self Assessment Tax: How To Pay, Calculate And Download Challan Online

Taxes are financial charges imposed by the government on individuals and entities to generate revenue for public expenditure. Generally, each person or organization is responsible for paying their own taxes, and this obligation cannot be transferred to another party. Taxes are broadly classified into two categories: Direct Taxes and Indirect Taxes. Direct taxes are levied directly on individuals or entities and cannot be shifted to others. The government primarily collects direct taxes through the following three mechanisms:

• Tax Deducted at Source (TDS) – Tax is deducted at the time of income generation
• Advance Tax – Tax is paid in installments during the financial year based on estimated income.
• Self-Assessment Tax – The balance tax paid by the taxpayer before filing their income tax return, after accounting for TDS and advance tax.

In this article we will delve into the details of self-assessment tax: how to pay it and how to download the challan for ITR filing. 

What is Self Assessment Tax?

When filing your taxes, the TDS and advance taxes you paid during the year will be deducted from your final tax payable. If the amount you paid is not enough, you will need to pay the remaining balance to cover the difference, which is referred to as self-assessment tax.

It is paid after the end of the financial year but before filing the income tax return. Paying this on time helps you avoid any penalty or interest.

How to calculate self-assessment tax?

To calculate self-assessment tax, follow these steps:

• Sum up your total income by adding from all sources , such as salary, profession, business profits, capital gains, and other sources.
• Deduct all the allowable tax deductions and exemptions, such as investments made under Section 80C, 80D, and other deductions. 
• Calculate tax on the balance amount as per the slab rates. This is your total amount of tax payable.
• Next, compute using the formula below.

[(A+B) – (C+D+E+F)]

Where, 

A = Total tax payable

B = Interest as per section 234A/234B/234C 

C= Tax Relief under Section 90/90A/91

D= MAT Credit under Section 115JAA

E= TDS/TCS 

F= Advance Tax 

Note: Interest under Section 234A will be paid in case of late filing of income tax returns;  
Section 234B/234C: will only be paid in case of late payment of Advance Tax. 

How to pay self-assessment tax online?

You can pay the Self Assessment Tax online using the following steps:

Step 1: Visit the Income Tax e-filing portal and log in to your account.

Step 2: Select ‘e-pay tax’ under the e-file from the top Row.

Step 3: Now, click on the new payment button.

Step 4: Select  the 1^st option ‘Income Tax’ from the list of options and click on ‘Proceed’.

Step 5: Select the correct ‘Assessment Year’ and select ‘Self-Assessment Tax (300)’ from the dropdown menu and continue to the next step.

Step 6: Enter the tax amounts here and continue to complete the payment.

Step 7: Select the bank through which you want to make the payment and the preferred payment mode.

After the payment is successful, you can download the Challan by clicking on the download button.

How to download the self-assessment tax challan

Step 1: Visit the Income Tax e-filing portal and log in to your account.

Step 2: Click on the "e-File" tab and select "e-Pay Tax" option.

Step 3: Click on “Payment History” and find the self-assessment challan that you want to download and then under the “Action” tab click on the three dots and then click on “Download”.