1. Provisions of Section 140A of Self-Assessment
The provisions of section 140A are given below—
1. Every person, before submitting a Return of Income under:
- Section 139 or
- Section 142(1) or
- Section 148 or
- Section 153A,
is under an obligation to make a self-assessment of his income and after taking in account the amount of tax, if any, already paid, pay the self-assessment tax, if due.
The assessee shall be liable to pay such tax together with interest and fee payable for any delay in furnishing the return or any default or delay in payment of advance tax.
2. Before submitting the aforesaid return, he is supposed to find out whether any tax and/or interest and/or fee is payable. For this purpose, tax and/or interest and/or fee shall be calculated as follows:
3. Self-assessment tax so determined shall be deposited by the assessee before submitting return of income. From April 1, 2008, all corporate assessees and other assessees (who are subject to compulsory audit under section 44AB) will have to make electronic payment of tax through internet banking facility offered by authorized banks. Alternatively, these taxpayers can make electronic payment of tax through internet by way of credit or debit cards.
4. The proof of deposit should be submitted along with the return of income (i.e., BSR code of bank, Serial No. of challan, amount of deposit and date of deposit).
5. Where the amount paid by the assessee falls short of the aggregate of tax, interest and fee, as determined above, the amount so paid shall first be adjusted towards interest and fee payable and the balance, if any, shall be adjusted towards tax payable.
Other points - The following should also be kept in view:
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After a regular assessment of income has been made, any amount paid under section 140A shall be deemed to have paid towards such regular assessment.
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If any assessee fails to pay whole or any part of such tax or interest or fee in accordance with the provisions of section 140A, he shall (without prejudice to any other consequences which he may incur) be deemed to be an assessee in default in respect of the tax or interest or fee remaining unpaid, and all the provisions of the Act shall apply accordingly.
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2. Procedure for Self-Assessment and Determination of Tax Liability of Self-Assessment :
(A) Tax Liability of Self-Assessment
Determination of the tax liability of self-assessment tax of return of income is explained in the following steps:
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Compute the total income;
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Calculate the tax payable on the total income at the rates in force;
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Add surcharge, if applicable, on tax computed;
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Add education cess @ 2% plus SHEC @ 1%;
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From the tax payable, calculated under step (4), deduct the following:
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any relief under section 89;
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any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
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any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section;
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any tax credit claimed to be set off in accordance with the provisions of section 115JAA (MAT credit) or section 115JD (AMT credit);
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any tax deducted or collected at source; and
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the amount of tax, if any, already paid under any provision of this Act e.g. advance tax;
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Add interest and fee payable for the following to the Net-tax calculated at step (5):
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Interest for late filing of return under section 234A computed on the amount of the tax on the total income as declared in the return as reduced by the amount of—
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advance tax, if any, paid;
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any tax deducted or collected at source;
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any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
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any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
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any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD.
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Interest for default in payment of advance tax under section 234B computed on amount equal to the assessed tax or the case may be, on the amount by which the advance tax paid falls short of assessed tax. For meaning of assessed tax see point 2 in box;
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Interest for deferment of advance tax (under section 234C);
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fee for delay in furnishing of return of income as prescribed under section 234F (applicable for return of income furnished for the assessment year commencing on or after 1.4.2018).
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The above tax, interest and fee payable should be paid as self-assessment tax before filing the return of income.
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Interest payable under clause (vi)(a) and (b) above shall be only for the purpose of section 140A i.e. for self-assessment. However, it is not same as what is payable under section 234A or section 234B. Under section 234A, the interest is chargeable on the amount of tax on total income determined under section 143(1) or regular assessment under section 143(3)/144 as reduced by TDS/TCS, advance tax paid, relief under section 90, 90A or 91 and MAT credit under section 115JAA or 115JD. Whereas under section 140A, it is payable on amount of tax determined on the total income as declared in the return reduced by TDS, advance tax, relief, etc.
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Similarly, for the purpose of interest payable under clause (6)(ii) as per section 234B above, the meaning of assessed tax for the purpose of section 140A is different than what is given for section 234B. For the purpose of this section "assessed tax" means the tax on the total income as declared in the return as reduced by the amount of—
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tax deducted or collected at source, in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
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any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
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any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
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any tax credit claimed to be set off in accordance with the provisions of section 115JAA or 115JD.
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Section 139 includes sections 139(1), 139(3), 139(4), 139(4A), 139(4B), 139(4C), 139(4D) and 139(5).
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Proof of payment of self-assessment tax must accompany the return of income.
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Where the amount paid by the assessee as self-assessment tax falls short of the aggregate of the tax and the interest (the word "fee" also inserted in case of return furnished for A.Y. 2018-19 and onwards) calculated at step No. (7) above, the amount so paid as self-assessment tax by the assessee shall first be adjusted towards the interest and fee payable and the balance, if any, shall be adjusted towards the tax payable.
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The self-assessment tax shall be deemed to have been paid towards 'tax due' on regular assessment.
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The self-assessment tax under section 143 shall be deemed to have been paid towards 'tax due' on regular assessment. However, this tax does not become refundable on failure of a regular assessment. Where the assessment is annulled, only the amount, if any, paid in excess of tax chargeable on total income returned by the assessee is refundable.
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(B) Procedure of Self-Assessment Tax of Return
After submission of return of income by the assessee to the Income-tax Department, the process of assessment commences. In some cases, the assessment may be taken up by the Assessing Officer, even though the return of income is not submitted, although the assessee was required to do so. The Assessing Officer can make the assessment in any of the following ways:
(i) Summary Assessment/ Pprocessing of return to determine tax payable or refundable |
On the basis of the return of income [u/s 143(1)]. |
(ii) Scrutiny Assessment |
On the basis of return of income and hearing further additional evidence [u/s 143(3)]. |
(iii) Best Judgment Assessment |
Under section 144 |
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