The key difference between the regular-assessment tax and self-assessment tax

Introduction

Taxation is an important source of revenue for governments around the world. In India, the Income Tax Department is responsible for collecting taxes from individuals and businesses. The tax system in India is divided into two categories: Tax on regular and self-assessment tax. In this blog, we will explore the difference between tax on Regular-assesment tax and self-assessment tax.

What is Tax on Regular Assessment?

Tax on regular-assessment tax is the tax amount that is calculated by the Income Tax Department, based on an individual or business’s income in a particular financial year. After the taxpayer has filed their Income Tax Return (ITR), the department officers access it to verify its accuracy and completeness. If there is any discrepancy in the ITR, the taxpayer is required to provide evidence to support their claims. The Income Tax Department may initiate proceedings for tax recovery if discrepancies are found.

What is Self-Assessment Tax?

Self-assessment tax is the tax amount that is calculated and paid by the taxpayer, based on their estimated tax liability. The taxpayer is required to calculate their tax liability based on the income earned during the financial year and pay the tax due before filing the ITR. The taxpayer must make sure that the tax amount paid matches the tax liability calculated. The ITR includes details of the self-assessed tax paid, along with other information about the taxpayer’s income and deductions.

Key differences between tax on regular assessment and self-assessment tax

 There are some key differences between tax on regular and self-assessment tax that are listed below-:

1. Calculation of Tax Liability: The primary difference between tax on regular and self-assessment tax is how the tax liability is calculated. Tax on Regular Assessment is calculated by the Income Tax Department after assessing the taxpayer’s ITR. On the other hand, self-assessment tax is calculated and paid by the taxpayer based on their own estimate of their tax liability.

2. Timing of Payment: Another key difference between the tax on regular and self-assessment tax is the timing of payment. Tax on regular assessment is paid after the Income Tax Department assesses the taxpayer’s ITR. On the other hand, self-assessment tax is paid by the taxpayer at the time of filing the ITR.

3. Initiation of Proceedings: The initiation of proceedings is another difference between the tax on regular assessment and the self-assessment tax. In Regular-assessment tax, the proceedings are initiated by the Income Tax Department if there is any discrepancy or error in the ITR filed by the taxpayer. On the other hand, there is no initiation of proceedings in the case of self-assessment tax.

4. Evidence: Another key difference between the tax on self and regular assessment is that it asks the taxpayer to provide evidence to support the claims made in the ITR and later does not ask the taxpayer to provide any evidence.

Similarities between tax on regular assessment and self-assessment tax

Listed below are the similarities between tax on Regular-assessment tax and self-assessment tax:

1. Tax Liability: Both taxes on self and regular assessment are forms of tax liability. Taxpayers are required to pay taxes based on the income earned during the financial year.

2. Payment of Tax: Both taxes on Regular-assesment tax and self-assessment tax are forms of tax payment. Taxpayers are required to pay taxes based on the income earned during the financial year.

3. Filing ITR: Both taxes on self and regular assessment are linked to the ITR. Taxpayers are required to file the ITR to calculate the tax liability and pay the tax due.

Key Takeaways

Tax on regular and self-tax are two forms of tax payment in India. The primary differences between them are the timing of payment, initiation of proceedings, and evidence requirements. However, both are forms of tax liability and payment and are linked to the ITR. It is important for taxpayers to understand the differences between tax on Regular-assesment tax and self-assessment tax in order to avoid any errors or discrepancies in their tax filings.