Section 140A of the Income-tax Act: Self-Assessment Tax Explained
Self-assessment tax is the balance income tax payable by a taxpayer on the income disclosed in a return, after giving credit for eligible taxes already paid, deductions at source, tax relief and other allowable credits. Section 140A requires payment of the balance, together with applicable interest and fees, before filing the relevant return.
What is self-assessment tax under Section 140A?
Under section 140A(1), a taxpayer determines the tax payable on the income reported in a return and pays the outstanding amount before furnishing that return. The provision applies to returns under section 139 and other applicable return or notice provisions, including sections 142, 148 and relevant search-assessment provisions, as the law applicable to the year requires.
Self-assessment tax is distinct from advance tax, which is paid during the financial year, and TDS/TCS, which is deducted or collected by another person. It is the amount remaining after valid credits are taken into account.
How to calculate self-assessment tax
- Compute taxable income under the correct tax regime and applicable year, including surcharge and health and education cess where applicable.
- Deduct eligible advance tax, TDS and TCS credits appearing in the taxpayer's records and applicable statements.
- Apply eligible relief, including relief under section 89 and foreign tax relief under sections 90, 90A or 91, subject to statutory conditions.
- Deduct eligible MAT/AMT tax credits under sections 115JAA or 115JD, where applicable.
- Add interest and filing fees payable under the applicable provisions, and account for any other amounts required by section 140A as amended for the relevant year.
- Pay the net amount using the appropriate self-assessment tax payment option and report the challan details in the return.
| Component | Illustrative amount (INR) |
|---|---|
| Income tax including applicable cess | 90,000 |
| Less: TDS and advance tax credits | 65,000 |
| Balance tax | 25,000 |
| Add: applicable interest and fee (illustrative) | 2,000 |
| Total self-assessment payment | 27,000 |
The figures are illustrative only. Actual liability depends on the assessment/tax year, income, credits, applicable rates and statutory calculations.
Interest, late fees and order of adjustment
Interest under sections 234A, 234B and 234C
For years governed by the 1961 Act, section 234A concerns delay in filing the return, section 234B concerns default or shortfall in advance tax, and section 234C concerns deferment of advance-tax instalments. Their calculation bases and applicable periods differ. Section 140A(1A) and (1B) specifically address the computation of interest under sections 234A and 234B for self-assessment purposes.
Late filing fee under section 234F
Where the return is filed after the applicable due date, a fee may be payable under section 234F, subject to its conditions. Do not confuse this fee with interest on unpaid tax.
Priority where payment is insufficient
The Explanation to section 140A(1) provides that an insufficient payment is applied first towards fee, then interest, and finally tax. Accordingly, paying only the nominal balance tax without the applicable fee and interest may leave tax outstanding.
How to pay self-assessment tax online
- Open the official Income Tax e-Filing Portal and choose the e-Pay Tax facility.
- Identify the taxpayer using PAN and the portal's required authentication process.
- Select the correct Act, assessment year or tax year and the applicable payment category, including self-assessment tax.
- Enter the tax, surcharge, cess, interest, fee and other amounts under the correct heads.
- Complete payment using an available method and retain the challan identification number and payment receipt.
- Ensure the payment is reflected in the return and reconcile it with available tax-credit information before submission.
Payment screens and options may change. Follow the portal's current instructions and check the official Tax Payments guidance.
Section 140A: explanation of the principal provisions
Subsection (1): payment before furnishing the return
Tax calculated from the return is reduced by eligible tax payments, TDS/TCS, specified relief and credits. The remaining tax, interest and fee must be discharged before filing. The amended provision also refers to relief under section 89 and, where relevant, amounts under section 191(2).
Subsections (1A) and (1B): interest computation
These provisions prescribe how interest under sections 234A and 234B is determined for the purposes of self-assessment, including relevant credits and the meaning of assessed tax. They should be read with the charging provisions and amendments applicable to the year concerned.
Subsection (2): credit towards assessment
Self-assessment tax paid under subsection (1) is treated as a payment towards the regular or other assessment subsequently made under the applicable provisions. It does not eliminate the possibility of additional tax, interest or refund following assessment.
Subsection (3): consequences of non-payment
Failure to pay all or part of the tax, interest or fee can result in the taxpayer being treated as an assessee in default for the unpaid amount. Other recovery or penalty consequences may apply under the relevant provisions.
Subsection (4): historical assessments
The transitional subsection preserves the pre-1987 version of the section for assessments relating to assessment year 1988-89 or earlier. It is retained for historical legal interpretation and is not a general rule for present-day returns.
Income-tax Act, 2025: corresponding Section 266
Section 266 of the Income-tax Act, 2025 addresses self-assessment under the new legislation. Although it corresponds to section 140A, its drafting and cross-references differ. Taxpayers should apply the law for the relevant income period rather than assuming the 1961 Act's section numbering remains operative for new tax years.
| Income period | Applicable self-assessment provision | Portal year selection |
|---|---|---|
| FY 2025-26 (1 April 2025 to 31 March 2026) | Section 140A, Income-tax Act, 1961 | Assessment Year 2026-27 |
| Tax Year 2026-27 (1 April 2026 to 31 March 2027) | Section 266, Income-tax Act, 2025 | Tax Year 2026-27 |
For the 2025 Act, interest on delayed return filing and advance-tax defaults is addressed under renumbered provisions, including sections 423, 424 and 425 as applicable. Consult the current statute and portal guidance before calculating an amount.
Frequently asked questions
Is self-assessment tax payable before filing an ITR?
Yes, where a balance is payable, section 140A requires the tax together with applicable interest and fee to be paid before furnishing the return.
Can TDS and advance tax reduce self-assessment tax?
Yes. Eligible TDS, TCS and advance-tax payments are considered when determining the net tax payable, subject to applicable credit rules.
What if self-assessment tax is not fully paid?
The unpaid amount can result in assessee-in-default consequences under section 140A(3), alongside other applicable provisions.
Which Act applies when paying tax for FY 2025-26 in 2026?
The Income-tax Act, 1961 applies to self-assessment tax for FY 2025-26 (AY 2026-27), even if the payment is made after 1 April 2026.
Official legal texts and taxpayer resources
- Section 140A of the Income-tax Act, 1961 (2025 text), Income Tax Department
- Income Tax Department: tax payments and transition FAQs
- Income Tax Department: statutes, rules and notifications
- Income Tax e-Filing Portal
- India Code: central legislation
This article explains the principal legal requirements and is not a substitute for the enacted text, applicable amendments, notifications or professional advice in an individual case.