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Every business individuals, self-employed professional, entrepreneur or company owner must compute their income efficiently during the payment of advance tax or when TDS is made. Any type of error in self-assessment will lead to defects or rejections in tax returns.
If there are any flaws in self-assessment of the tax, the assessing officer will deem the return as invalid and give the assesse another opportunity for amending the faults within 15 days. Upon the inability of the assesse to correct the changes before the due date, the return will be nullified.
Taxpayers must determine their finalized income tax liability after Tax Deducted at Source (TDS) amount and the advance tax payable for the financial year are deducted from the income. At the end of a year, if there are any pending taxes that needs to be paid before filing for income tax return, then this pending amount, due to be paid is known as the self-assessment tax. Self-Assessment Tax (SAT) is the final calculations which are done before tax return filing.
Individuals with undeclared income from any sources must declare the extra income and pay the self-assessment tax due on their part. Even without the intention of doing so, some taxpayers miss out on mentioning extra earnings during the final installment of paying advance tax, which is why it is very crucial to reconsider the overall income before making the final settlement. Self-assessment tax also is applicable if TDS wasn’t made on the income or it was done on a rate lower than the rate applicable to your income.
For instance, if you are a salaried individual and you have a fixed deposit out of which the interest earned was Rupees 14,000. Apart from the fixed deposit interest you also gained Rupees 23,000 from bonds on short-term capital. However, these earnings were not disclosed to your employer and they were not considered under your taxable income. Considering that you fall under the 20% tax bracket, your actual tax liability on the two incomes will be Rupees 7,400. The reason why it is important to pay the taxes as sooner as possible is that there will be an accumulation of interest on unpaid tax.
SAT is usually paid at the end of a financial year once it is over, however, there is no due date or a specific date for paying SAT. In order to avoid the interest payment on the tax amount, it is ideally advisable to pay the due tax at the earliest, instead of waiting until the time of filing for returns.
There are two ways to pay self-assessment tax; offline and online.
The payment made on SAT is usually reflected in your Form 26AS within 2-3 days of the payment. In case the payment is not reflected then produce the details of the challan while filing Income tax return.
For individuals who have paid the taxes before the assessment date, to calculate the interest amount, the following two processes will be considered
Follow the given procedure to calculate self-assessment tax
This process will determine the taxable amount of the self-assessment tax payable on your income tax.
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Business Television India: Following up on the Government’s initiatives to simplify the taxation process, All India ITR’s app launch to e-file ITRs promises to deliver ease of use for a range of users. Created by experts in the field, this app, also offers subscriptions to professional Chartered Accountants at affordable rates.
13th June 2017
Business Television India