From TDS to Self-Assessment Tax – Your Complete Guide!

If you’re eligible to pay income tax, you can easily file your returns yourself. The government has simplified the process by collecting taxes through three ways – TDS, advance tax, and self-assessment tax.

Author:IndiaFirst Life | Date:17 Nov 2023 | Time:16:26:00

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If you’re eligible to pay income tax, you can easily file your returns yourself. The government has simplified the process by collecting taxes through three ways – TDS, advance tax, and self-assessment tax.

TDS or Tax Deducted at Source refers to a small percentage of your income tax that gets deducted from income you receive from salary, rent, or fees.

Advance tax is income tax that you pay in advance, in smaller quarterly instalments throughout the year.

Self-assessment tax is the pending balance amount to be paid after TDS and advance tax payments. Let us understand this is in detail.

What is self-assessment tax?

‘I’ve paid my income tax with TDS and advance tax; why should I pay more?’ Valid question, however, in the rush to pay advance tax, it’s possible to have inadvertently omitted some income.

Self-assessment in income tax is also payable on incorrect or insufficient TDS deductions. Or you could have received unexpected returns on your investments or additional income from other sources.

Self-assessment tax occurs when the total tax paid through TDS or advance tax is less than the actual tax obligation. It is important that you pay this, however small the amount may seem, to avoid unnecessary penalties.

How do you make your self-assessment tax payment?

Step-by-Step guide to completing your self-assessment tax return

After you’ve calculated your self-assessment tax, you can pay it online or by paying it in person at your bank with a special form.

Paying self-assessment tax online:

  1. 1. Visit and log in with your Permanent Account Number (PAN) or Aadhaar number.

  2. 2. Click on the “e-pay tax” under the “e-filing” option on the homepage.

  3. 3. Under pay e-tax option, select “New Payment”.

  4. 4. Click on “Proceed” under the “Income Tax” tab.

  5. 5. Add the applicable assessment year from the drop-down option and select the type of payment as “Self-Assessment Tax (300)” and click “Continue”.

  6. 6. After adding the tax liability and other required details as applicable, click “Continue”.

  7. 7. Select the mode of payment as preferable and click “Continue”.

  8. 8. Make the required payment.

Paying self-assessment tax at the bank:

  1. 1. Download and print tax challan 280 from the Income Tax website:

  2. 2. Fill in your PAN, assessment year, residential address, email id, and mobile number.

  3. 3. Submit the completed challan form physically to the bank along with the income tax self- assessment tax payment and collect the stamped receipt.

Remember to keep a copy of the self-assessment tax payment receipt, as you may need it for your tax return, in case the Form 26AS statement takes time to reflect the details.

Mistakes to avoid when filing your self-assessment tax return

We are likely to make mistakes when filing our income tax self-assessment tax return. The filing date is 31st July, but most people tend to put this off till the last minute and filing it in a hurry can create errors.

Here is a checklist you can refer to, to help you file your self-assessment tax return accurately, irrespective of whether you are filing your self-assessment tax return online or physically.

  1. 1. Check that you’re filling the correct form:

    This is the first and most important step as there are many forms depending on the nature of income or taxpayer’s category. Submitting a wrong ITR form means receiving a notice from the IT department and redoing the process within a stipulated timeframe. That’s double work!

  2. 2. Mention the correct assessment year:

    Confused between FY (Financial Year) and AY (Assessment Year)? For FY 2022-23, the AY is 2023-24. Writing the wrong AY will attract unnecessary penalties.

  3. 3. Mention all details correctly:

    Your name, address, date of birth, PAN number and other details should match your PAN card. If you are expecting a refund, ensure that you write the correct bank account number and IFSC code. Ensure that all details are written in the stipulated format.

  4. 4. File your returns even if TDS is deducted:

    You may think that since TDS has been deducted on your salary or rental income, there is no need to file a self-assessment tax return. However, filing of income tax is mandatory for anyone with an income exceeding Rs.2.5 lakhs a year.

  5. 5. Disclose all sources of income:

    Apart from your earnings or salaried income, savings account interest, fixed deposit interest, rental income from house property, income from short-term capital gains and any other income source must be disclosed, whether it is taxable or exempt.

  6. 6. Reconcile TDS With Form 26AS:

    Before income tax self-assessment tax payment, remember to check Form 26AS, which includes all your income, TDS, advance taxes paid, and more. If your employer deducts TDS from your salary, verify the TDS details with Form 16 issued by the employer with the Form 26AS. Any discrepancies could mean losing out on the credit for tax deductions, less refund, or paying more taxes. While you are allowed to claim deductions of up to Rs 1.5 lakh in a financial year by way of certain investments and expenses, be clear about what expenses are eligible and what are not.

  7. 7. HRA benefits:

    To claim HRA benefits,, you must submit your rent receipts to your company along with your landlord’s PAN details.

  8. 8. File and verify your self-assessment tax return on time:

    Once you finish filing your taxes online, don't forget to verify them. You can do it online with your bank, Aadhaar card, or your phone. If for any reason you cannot do it online, send it by mail within 120 days. It's important

Also read: A Comprehensive Guide to the New Income Tax 

Need help with these painstaking and long-winded calculations?

To get the exact amounts, the use of IndiaFirst Life Income Tax calculator will help, considering the amount of calculations involved. Entering all deductions, savings, and investments will show the correct tax amount.

To know more about an intelligent Income Tax calculator, click here.

In conclusion, paying income tax is simple and can be done in three ways - TDS, advance tax, and self-assessment tax. Self-assessment tax is paid when you realize you missed some income or haven’t deducted enough TDS. You can pay it online or at a bank. Be careful when filing your taxes, avoid mistakes, and make sure to verify your return. It's crucial to do it on time for a hassle-free tax season.


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