Tax on regular assessment is a system of calculating and paying income tax on the actual income earned during a financial year. It is the final step in the process of income tax computation and is mandatory for all taxpayers.
The process of regular assessment begins with the filing of the income tax return (ITR) by the taxpayer. The ITR is a declaration of the taxpayer’s income and the taxes paid on it during the financial year. The taxpayer must file their ITR before the due date, which is usually July 31st for individuals and September 30th for companies.
Once the ITR is filed, the Income Tax Department (ITD) will process it and may ask for additional documents or information if required. After that, the ITD will calculate the taxpayer’s tax liability based on their actual income for the financial year and the taxes paid on it. If the taxpayer has paid more taxes than their final liability, they will receive a refund, and if they have paid less, they will have to pay the outstanding amount.
The tax liability can be paid online through the ITD’s e-filing portal or by visiting a designated bank. It is important to note that non-payment or delayed payment of tax on regular assessment can result in interest and penalties. Interest under Section 234A is levied if the tax is not paid by the due date, while interest under Section 234B is levied if the advance tax paid is less than 90% of the total tax liability.
In conclusion, tax on regular assessment is a system of calculating and paying income tax on the actual income earned during a financial year. It is mandatory for all taxpayers and begins with the filing of the income tax return. The Income Tax Department will process the ITR and calculate the taxpayer’s tax liability, which can be paid online through the ITD’s e-filing portal or by visiting a designated bank. Non-payment or delayed payment of tax on regular assessment can result in interest and penalties