Saving Taxes!
Did you know the government collects taxes on your income through three different means:
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.
Budget 2025 Updates
The new Income Tax Bill has been tabled by the Honorable Finance Minister in the Lok Sabha. It aims to simplification and better presentation of the provisions.
As per the budget 2025, the income up to Rs. 12,00,000 will have zero tax liability for the FY 2025-26 (AY 2026-27) under the new tax regime. Here's how:
The revised tax slabs under the new regime for FY 2025-26 (AY 2026-27) are as follows:
Annual Income Tax Slabs
income Tax Rates
Upto Rs. 4,00,000
NIL
Rs. 4,00,001 - Rs. 8,00,000
5%
Rs. 8,00,001 - Rs. 12,00,000
10%
Rs. 12,00,001 - Rs. 16,00,000
15%
Rs. 16,00,001 - Rs. 20,00,000
20%
Rs. 20,00,001 - Rs. 24,00,000
25%
Above Rs. 24,00,000
30%
With the revised tax structure, individuals earning up to Rs. 12,00,000 will have no tax liability due to the increased rebate of Rs. 60,000. For salaried individuals, the tax liability will be zero for incomes up to Rs. 12,75,000, due to the Rs. 75,000 standard deduction.
Note:
- The marginal relief on rebate is still applicable.
- The rebate is not available for income that is taxed at special rates (e.g., capital gains under section 112A).
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.
To calculate self-assessment tax, follow these steps:
[(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.
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: Click on the "e-File" tab and select "e-Pay Tax" option.
Step 3: Now, click on the new payment button.
Step 4: Select ‘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.
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”.