Those who are earning will have tax liabilities to bear if they come under the suitable tax slab. However, this entire procedure may sometimes seem complex. For new taxpayers, navigating these aspects can be challenging, particularly self-assessment tax. Let us look at this concept in slightly more detail.
Knowing More About Self-Assessment Tax
Self-assessment tax is basically what you have to pay to the Government after you have paid advance tax and TDS. The latter is automatically charged in India and you have to pay the former if your tax (post TDS deduction) exceeds Rs. 10,000. Once these are done, you will have to again work out the liability for taxation and if the paid taxes are lower than the final amount, self-assessment tax is what you will have to pay it as.
Who Needs to Pay It?
Any person with tax liabilities exceeding payments as advance tax and TDS will have to complete self-assessment tax payments. It can be both salaried and self-employed personnel in this case.
How Is Self-Assessment Tax Calculated?
The calculation procedure for self-assessment tax is not difficult. Here are the taxation slabs under the new and old regimes.
| Income Slab | Old Regime | New Regime |
| (From 1st April, 2023) | ||
| Up to Rs. 2.5 lakh | Zero | Zero |
| Rs. 2.5-3 lakh | 5% | – |
| Rs. 3-5 lakh | 5% | 5% |
| Rs. 5-6 lakh | 20% | 5% |
| Rs. 6-7.5 lakh | 20% | 10% |
| Rs. 7.5-9 lakh | 20% | 10% |
| Rs. 9-10 lakh | 20% | 15% |
| Rs. 10-12 lakh | 30% | 15% |
| Rs. 12-12.5 lakh | 30% | 20% |
| Rs. 12.5-15 lakh | 30% | 20% |
| More than Rs. 15 lakh | 30% | 30% |
Just to take an example, assuming your income (taxable) is Rs. 12,50,000 in the old regime without any deductions. Thereafter, it will be 5% for Rs. 2.5 lakh (the first 2.5 lakh is tax-exempted) and 20% for Rs. 5 lakh, followed by 30% for Rs. 2.5 lakh. The total self-assessment tax will thus be Rs. 12,500 + Rs. 100,000 + Rs. 75,000- Rs. 1,87,500. Then there is the cess that is payable on the same.
Method to Pay Self-Assessment Taxes
You can complete the self-assessment tax payment by following these steps:
- Visit the official e-filing portal of the IT department
- Visit the e pay section and then choose Challan 280
- Fill up details of your income and all claims for deduction
- Select the self assessment option and work out your tax liabilities
- Complete your payment by choosing from the available methods
How to Avoid Basic Errors
- Use tax calculators for more accurate calculations
- Always match TDS details with Form 26AS for better accuracy
- Do not file at the last minute or after the deadline
- Take help from a professional in case you find tax calculations difficult
Even for new taxpayers, this guide will help immensely in the payment of self-assessment taxes minus any issues.
