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Everything You Would Want to Know About ‘Self Assessment Tax’

Tax payment is in no case a child’s play. It requires a lot of time, efforts, calculation and skills. You can’t afford to mistake or un-pay the tax. This is why most of the personages and tax payers prefer to pay the estimated (or calculated) amount of tax in the beginning of the year; this type of Tax is known as “advanced tax” which is viable as well as a smart way to pay.

However, in certain cases the total tax amount calculated in the end of the year exceeds the amount of the tax paid; the remaining amount has to be paid by the tax payer and this kind of tax is known as “Self Assessment Tax”. In other words, the self assessment tax is the payable tax total in excess of the advance tax (pay as you earn tax) and TDS payable as a liability by the income tax assessee (including the taxable individuals and Corporates).

Why Self Assessment Tax Arises?

In some situations due to negligence or certain discrepancy in computation, the tax amount paid by the tax payer (assessee) as advance tax or TDS fall short of the real sum of the actual tax payable. This balance tax arisen as a left amount is needed to be paid with the tax authorities to liberate one’s tax liability.

What is Its Due Date?

There is no fixed date or time for the imbursement of Self assessment tax. However, the payment of the tax is required to be made before filing the ITR (Income Tax Return) before the end of that financial year of which the tax payment is due. There are two methods of self-assessment tax payment –online and offline; Challan ITNS-280 has to be filled for both modes.

Consequences Of Wrong Self Assessment

In case of an incorrect or wrong self assessment of corresponding tax, the Income Tax Provisions allow the payable individuals to rectify their return within fifteen days of the incorrect payment. If however, the assessee ignores the notice and doesn’t make the required rectification, the paid amount is deemed to be defective.

Furthermore, self assessment tax is so important o be paid as a full skip of the tax pay in any case could be considered as a criminal offense for which the individual is liable to be penalized and / or punished under the court of law.

The Word of Advice

As it can be quite a complex process to make the right self assessment of the income (corresponding tax) the corporate, businesses and also the taxable individuals may require an expert support. A professional Self assessment accountant may provide the real, much needed help and save you from all the consequences and penalties!

Our previous Blog: Why Does a Start-Up Need to Hire an Accounting Services Provider?

 

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