What is self-assessment tax?
Self-assessment tax is the difference between your final tax liability and the sum of TDS and advance taxes paid during the year. You must pay this remaining tax amount before filing your income tax return. This ensures that you have paid the correct amount of tax as per your income and deductions. You generally settle this tax after the end of the financial year but before filing your income tax return. Paying it on time will help you avoid any penalties or extra interest charges.
Who should pay Self-assessment tax?
Those who have not paid enough advance tax throughout the year. Advance tax is a prepayment of income tax that is paid in installments throughout the year. If an individual's advance tax payments do not cover their total tax liability, they will need to pay the remaining balance in the form of SAT.
Individuals who have income from sources that are not subject to tax deduction at source (TDS). TDS is a system where tax is deducted from an individual's income at the source, such as by their employer or by banks. If an individual has income from sources that are not subject to TDS, they will need to pay SAT on that income.
Individuals who have made any adjustments to their income or deductions after filing their advance tax returns. If an individual's income or deductions change after they have filed their advance tax returns, they may need to adjust their SAT payments accordingly.