Before filing your tax returns this year, calculate and pay self-assessed tax

  • Taxpayers are required to pay tax on the consolidated income from all the five sources of income—income from salary, business and profession, house property, capital gains and other sources
  • Tax can be paid either offline at designated branches of banks empanelled with the I-T department, by filling up challan 280 or online through Incometaxindia.gov.in

Before filing your income tax return (ITR) this year, ensure there is no pending tax payable on your part through self-assessment. For this, you need to take into account your incomes from various sources, including those on which tax deducted at source (TDS) is not applicable, and the tax payable on them. If there is any pending tax, you need to settle it before filing your ITR. If you don’t, you will be reminded to pay tax while filing ITR online on any income on which tax is not paid or a lower TDS is paid is reflected in Form 26AS. Such pending tax is usually known as self-assessment tax. You are also supposed to enter the challan number of the tax paid in the ITR form. Here’s how you can calculate self-assessment tax and the process to pay it.

Self-assessment tax

Taxpayers are required to pay tax on the consolidated income from all the five sources of income—income from salary, business and profession, house property, capital gains and other sources.

In most cases, income is paid after TDS by the payee in accordance with the rate stipulated in the income tax rule. For instance, an employer is required to deduct TDS as per the income tax slab applicable to the employee. Banks need to deduct TDS if the interest income exceeds 40,000 in a financial year; TDS rate on such income is 10% if PAN is furnished and 20% otherwise.

However, there may have received payments on which TDS was not levied or was deducted at a lower rate compared to the tax rate applicable to you. Say, you are a salaried person, and apart from salary income, you made short-term capital gains of 25,000 from your bond investment. Your employer may not know about this income and, therefore, may not consider it while calculating your TDS. If you fall in the 20.8% (including cess) tax bracket, your tax liability on income from your bond investment would be 5,200. You need to pay this self-assessed tax before filing ITR.

How to pay?

You can pay the required tax either offline at designated branches of banks empanelled with the income tax department, by filling up challan 280 or online through Incometaxindia.gov.in. If you pay it offline, remember to collect the challan receipt and ensure that the acknowledgement has the challan information number (CIN), a seven-digit statistical code of the branch, and the date of deposit.

To pay it online, visit the department’s website and click on the option “e-Pay taxes". This will take you to the National Securities Depository Ltd’s website, where you need to select “challan no./ITNS 280". In the next step, choose “(0021) Income tax (other than companies)". Fill in all the details—Permanent Account Number, name, address, and contact details—and select the assessment year for which you are making the payment. Then, under the head “type of payment", select “(300) Self Assessment Tax". Choose the bank from the drop down list and make the payment. Remember that online payment is allowed only through Netbanking and not through credit or debit cards. On successful payment, a challan counterfoil will be displayed. This will have the CIN, payment details and the bank’s name through which you paid.

Usually, once the self-assessed tax is paid, it will reflect in your Form 26AS (which is like a statement of all taxes paid) within two to three days of the payment. If this does not happen, you can manually fill the details of the challan in your tax return.


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