Self-assessment tax under Income Tax : Analysis

By | May 19, 2018
(Last Updated On: May 21, 2018)

self-assessment tax under Income Tax

When is self-assessment tax payable under Income Tax

When on computation of income for the year for the purpose of filing the return of income/fringe benefits it is found that some tax remains payable even after adjustment of

(a) advance tax, if any, paid,

(b) tax deducted/collected at source,

(c) relief/deduction of tax claimed u/s 90 or 91 on account of tax paid in a country outside India,

(d) relief of tax claimed u/s 90A on account of tax paid in any specified territory outside India, and

(e) tax credit claimed u/s 115JAA or under section 115JD, such balance tax along with interest thereon is required to be paid as self-assessment tax before filing the return of income.

Any person filing return of income u/s 115WD, 115WH, 142, 148, 153A or 158BC shall also be liable to pay tax and interest in accordance with section 140A(1) of Income Tax Act].

How is self-assessment tax computed under Income Tax

Self-assessment tax may be computed as under :

a) Compute the total income for the year and the net tax payable thereon.

b) Deduct the advance tax paid, the tax deducted at source and the tax collected at source, relief/deduction of tax claimed u/s 90 or 91 on account of tax paid in a country outside India, relief of tax claimed u/s 90A on account of tax paid in any specified territory outside India, and tax credit claimed u/s 115JAA or section 115JD.

Note : After assessment has been made u/s 115WE or 115WF or 143 or 144 or 153A or 158BC, any amount paid u/s 140A(1) shall be deemed to have been paid toward such assessment.

c) Add the interest payable u/ss 115WK, 234A, 234B and 234C, if any.

d) The resultant figure is the amount of self-assessment tax and interest payable.

Filing of proof of payment for Self Assessment Tax

The return of income for the year is to be accompanied by proof of payment of self-assessment tax and interest.

How self assessment tax will be adjuted

where the amount paid by the assessee under section 140A(1) falls short of the aggregate of the tax and interest, the amount so paid shall be first adjusted towards the interest payable and the balance, if any, shall be adjusted towards the tax paid. [Explanation to section 140A]

Section 140A has been amended with effect from assessment year 2018-19 to provide as follows:

where the amount paid falls short of the aggregate of tax, interest and fee, the amount so paid shall be adjusted in the following order:
(i)fees payable;
(ii)interest payable;
(iii)tax payable.

Failure to pay self assessment tax

Where an assessee fails to pay self-assessment tax and interest as required by section 140A(1) of Income Tax Act he will be deemed to be an assessee in default and will be liable for penalty as provided in section 221 of Income Tax act. [ [section 140A(3) of Income Tax act]

Section 140A has been amended with effect from assessment year 2018-19 to provide as follows:

(a)in case of delay in furnishing of return of income, along with the tax and interest payable as aforesaid, fee for delay in furnishing of return of income shall also be payable [section 140A(1)].
The amendment is consequential to the insertion of a section 234F of Income Tax Act which provides for fee for delay in furnishing of return of income.
if the assessee fails to pay the fee, he shall be deemed to be an assessee in default in respect of the fee [section 140A(3)].

​How to deposit Self Assessment Tax ?

ITNS 280 Income Tax Challan : Download / Print / Pay

Interest on Self Assessment tax

Self Assessment Tax under Income Tax : Free Study Material

 

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