Pay self-assessment tax under Section 140A before filing ITR for AY 2026-27. Computation, Challan 280, 234B/C interest and common pitfalls explained.
Self-assessment tax is the final tax liability a taxpayer pays before filing the income-tax return, after adjusting TDS, TCS, advance tax, and MAT/AMT credits. In FY 2026-27, with stricter AIS-driven cross-checks and the new tax regime as default, self-assessment tax has become the bridge between your calculated liability and a clean return acknowledgement.
What Is Self-Assessment Tax
Under Section 140A of the Income-tax Act, every taxpayer must compute total income, apply applicable tax rates, reduce TDS/TCS/advance tax already paid, add interest under Sections 234A/B/C, and pay the balance as self-assessment tax before submitting ITR. Unlike TDS or advance tax, this is a one-time, voluntary payment made by the taxpayer.
Who Pays Self-Assessment Tax
Anyone whose final tax liability — after reducing pre-paid taxes — is positive must pay self-assessment tax. Common categories include:
- Salaried individuals with additional income (interest, capital gains, freelance) not covered by employer TDS.
- Self-employed professionals whose advance tax estimates fell short of actual income.
- Investors realising capital gains in March, after Q4 advance-tax deadlines.
- NRIs reporting Indian-source income where TDS did not cover the slab liability.
Computing Self-Assessment Tax
Start with gross total income, apply Chapter VI-A deductions (if in old regime), arrive at total income, and compute tax using slab rates. In the new tax regime for AY 2027-28: nil up to ₹3 lakh, 5% from ₹3-7 lakh, 10% from ₹7-10 lakh, 15% from ₹10-12 lakh, 20% from ₹12-15 lakh and 30% above ₹15 lakh, with Section 87A rebate up to ₹7 lakh income. Add health-and-education cess at 4%, surcharge where applicable, and interest under Sections 234A, 234B, 234C.
How to Pay Self-Assessment Tax
Use Challan ITNS 280 on the e-Pay Tax facility at the e-Filing portal or the bank's net-banking interface. Select '(300) Self Assessment Tax', assessment year, and amount. Pay via net-banking, UPI, debit card, or RTGS/NEFT. Save the challan with BSR code, challan serial number, and date; quote these in the ITR's tax payment schedule.
Interest Under Section 234B and 234C
If advance tax paid is less than 90% of assessed tax, Section 234B levies 1% per month on the shortfall from 1 April of the assessment year. Section 234C levies 1% per month for quarterly deferment shortfalls (15%, 45%, 75%, 100% benchmarks). Section 234A applies 1% per month on the unpaid balance from the original due date if ITR is filed late.
Common Mistakes to Avoid
Do not select the wrong assessment year on the challan — it cannot be corrected without an OLTAS request. Do not skip the cess or surcharge calculation. Always reconcile the challan in Form 26AS before submitting ITR; otherwise the system will not credit your payment and will demand the same tax again with interest.
Conclusion
Self-assessment tax closes the loop between your year-round tax payments and your final income-tax return. Calculate carefully under the new tax regime, pay via Challan 280 well before the ITR due date of 31 July 2027 to minimise Section 234A interest, and always verify the payment in Form 26AS. A clean self-assessment payment unlocks a smooth refund and a zero-notice assessment.
