Definition
Self-Assessment Tax
Self-assessment tax is the balance tax you pay yourself at the time of filing your return if TDS and advance tax fell short.
Self-assessment tax is paid when, while preparing your income tax return, you find that the tax already paid through TDS and advance tax is less than your final liability. You compute the shortfall, pay it via challan, and then file the return.
It may also include any interest due for late or insufficient advance tax. Paying self-assessment tax is a prerequisite for filing a valid return when a balance is due.
Once paid, the challan details flow into your Form 26AS, and the credit should be reflected when you file. Always pay it before submitting the return to avoid a defective or unprocessed filing.
Related terms
- Form 26ASForm 26AS is a consolidated annual tax statement showing all tax deducted, collected and paid against your PAN.
- ITR (Income Tax Return) TypesITR forms are different return formats (ITR-1 to ITR-7) prescribed for different categories of taxpayers and income sources.
- Advance TaxAdvance tax is income tax paid in instalments during the financial year as income is earned, rather than in a lump sum after the year ends.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.