Self Assessment Tax or SAT in short is the balance income tax that an income tax assessee has to pay before the filing of income tax return (ITR) after deducting the TDS and Advance Tax paid from his total tax liability.
Self Assessment Tax (SAT) = Total Tax Liability – Advance Tax – TDS
Why should we pay Self Assessment Tax?
As per the Income Tax Act, 1961 all the taxes due should be paid while filing your income tax return. If not, your income tax return will be considered as a defective return under section 139(9). Further, non-payment of income tax is an offence and could attract prosecution under section 276C(2) of the Income Tax Act. The punishment for an offence considered under the above section varies from 3 months to 3 years of rigorous imprisonment.
What income should I add for self assessment tax purpose?
Usually the salaried class of assessees who pay TDS and Advance Tax (if any) on income from other sources should calculate the income on the following investment options and should add them in Advance Tax:
Interest on fixed deposits: A situation may occur that you earned more than Rs.10000 on fixed deposits on which TDS was deducted by bank. However, you need to add the total income from such fixed deposits to your income and calculate your tax liability. You will be given credit for TDS amount that you have paid and it will be deducted from your tax liability. If you had not done this step earlier you should at least do it before filing the ITR, pay the balance payable tax as Self Assessment Tax and submit the Income Tax Return.
Interest on saving bank deposits: As per section 80TTA, an amount up to Rs.10,000 earned from all savings bank accounts are exempted from income tax. If you have crossed this limit, you should add the excess interest received over and above the limit of Rs.10,000 and add it to your income. This also changes your tax liability which needs to be paid as Self Assessment Tax.
Capital gains from sale of assets: It so happens that due to mistake in earlier calculation of your capital gains (from sale of shares, mutual funds and other assets etc), you might end up paying less tax. The balance such tax can also be paid through self-assessment tax.
Last Date for Payment of Self Assessment Tax?
There’s no specified last date in the Income Tax Act for payment of self assessment tax. It is usually paid before the due date of filing of return of income (5th August 2017 for AY 2017-18 and usually is July 31st of every year unless extension is granted by the CBDT).
How to pay the Self-Assessment Tax?
Similar procedure as we have explained in this post on Advance Tax. The only difference here is that you need to choose the (300) Self Assessment Tax under the type of payment instead of 100 which is the code for Advance Tax. Visit TIN-NSDL website for payment of Self Assessment Tax.
As you can see the appropriate challan number is ITNS 280 and the type code for Self Assessment Tax is 300.