What is difference between advance tax and self assessment tax?

What is advance tax and self assessment tax?

Advance tax and self-assessment tax are both types of income tax payments made by individuals and businesses in India.

But they both serve different purposes and are paid at different stages of the income assessment process.

Advance tax is a system of paying income tax in installments throughout the financial year, rather than paying the entire tax liability at the end of the year. It applies to individuals, self-employed professionals, freelancers, and businesses whose tax liability for the year is expected to be Rs. 10,000 or more.

Advance tax payments are typically made in four installments as follows:

• 15% of the total tax liability by June 15th of the financial year.

• 45% of the total tax liability by September 15th.

• 75% of the total tax liability by December 15th.

• 100% of the total tax liability by March 15th.

To understand the difference

between self assessment tax and tax on regular assessment, you also need to know a bit more about self assessment tax.

Self-assessment tax, on the other hand, is the tax paid by a taxpayer after assessing their actual income and calculating their tax liability for the entire financial year. This assessment is done while filing the income tax return. Self-assessment tax is paid by individuals and businesses to fulfill the remaining tax liability that was not covered through advance tax payments or tax deducted at source (TDS).

In the process of filing the income tax return, the taxpayer calculates their total income, claims deductions, and arrives at the final tax liability. If the total tax paid through advance tax and TDS is less than the calculated tax liability, the taxpayer needs to pay the balance amount as self-assessment tax. This is typically done before filing the income tax return.

In summary, the self assessment tax and advance tax difference is advance tax is paid in installments during the financial year based on estimated income, while self-assessment tax is paid after calculating the actual income and tax liability at the time of filing the income tax return. Both advance tax and self-assessment tax contribute to fulfilling the total income tax liability of the taxpayer. 

I would first like to clarify the definitions and details of advance tax and self assessment tax. As the term itself suggests, advance tax is the tax that should be paid in advance instead of paying it at the end of the year. It is also known as earn tax and needs to be paid in instalments as per the dates stated by the Income Tax Department. And SAT or Self Assessment Tax refers to the amount of money that an assessee needs to pay on the requisite income after the Advance tax and TDS for the year is deducted. Let me share details about self assessment tax vs tax on regular assessment as well to help you understand the taxes better. The above answers are absolutely correct so let me just add more to it.

What is the difference between self assessment tax and advance tax?

Ashna ji has highlighted the differences clearly. Just to add to it, I would say that the advance tax or self assessment tax are totally different because:

If the tax is paid for a particular financial year as per the approximate income it will be referred to as an advance tax. But if the tax gets paid after the financial year ends, it will be referred to as the self assessment tax. In short the advance tax gets paid in advance and before the end of the financial year but the self assessment tax gets paid only after the financial year ends.

Regular assessment tax is very different from the two mentioned above. This is the tax that gets levied upon a person when the tax department finds out that there is a difference between income and resultant tax. Everyone wants to save money hence do not pay the entire liable tax. When the department finds the difference, they compute the actual tax and demand the person to pay it. This demand raised on the person is called Tax on regular assessment.

The more you read about self assessment tax vs tax on regular assessment and also regular tax, the more you will be able to understand these concepts. 

Hey Friend,

I hope after going through Sharmaaashna’s answer, the advance tax, and

self assessment tax meaning should be crystal clear to you. However, I would like to reiterate what she said regarding the self-assessment tax, that is, the self-assessment Tax (SAT) is a tax that people must pay when they receive money from other sources.

Also, just to reiterate about the advance tax meaning, I would say that If the tax amount is Rs. 10,000 or higher after subtracting prepaid taxes like TDS, advance tax is required to be paid.

Sharmaaashna has explained almost all the points of difference between advanced and self-assessment tax. Hence, I would like to highlight the differences that lie in the advance tax and self assessment tax payment procedure.

How to pay self assessment tax online?

To pay the self-assessment tax online, follow these instructions. However, take aware that the site for online tax payments only accepts Net Banking:

• One can access the income tax website by visiting www.incometaxindia.gov.in.

• After logging in, the user will have the option to "e-Pay taxes."

• The National Securities Depository Ltd. website will be visited by the visitor who clicks on this link.

• Following that, the person can choose "challan no./ITNS 280" and "(0021) Income tax (other than corporations)".

• The person must then provide information such as PAN card information, name, and contact information including address, home, and work phone numbers, and mobile numbers.

• The person must next decide which assessment year, for which he or she will be making the payment, is appropriate.

• The next step is to choose the "kind of payment," in this case "(300) Self Assessment Tax."

• The person can then select their preferred bank from the drop-down box to make the payment.

• The next step is for him or her to input the "tax payable amount."

• The customer will then be taken to their bank's own Net banking page to complete the transaction.

• Upon successful completion of the payment, a challan will be seen. This will contain the CIN, all payment information, and the name of the bank that processed the payment.

• It is advised to maintain a hard copy or scan of the document.

• The SAT usually appears on the person's Form 26AS within a few days of being paid. The challan information can be filled out when completing an income tax return if it does not appear.

How to pay advance tax online?

• Select Challan number ITNS 280 by going to 

• Choose Tax Applicable (0021) Income-Tax (Other Than Companies)

(a) Choose Self Assessment Tax as the payment type (100).

(b) Decide on the payment method and the bank through which the payment must be made.

(c)Enter your Pan number in.

(d) Pick a test year (take precaution here and re-confirm your selection).

(e) Include your contact information.

(f) Type the captcha code and select the next button.

• Verify the information supplied, then press the "Submit to the bank" button.

• To make the payment, sign in to your retail/personal net banking account.

• Select the Submit/Make payment option after entering the total tax amount in the Basic Tax area.

• Following the quick tax payment process, you receive a challan counterfoil with the following bank information: BSR code, challan number, challan date, and challan amount. Please keep it secure for reference in the future.

So I think apart from understanding the advance tax, and

self assessment tax meaning, the process of paying both these taxes should also be crystal clear to you.

Read More:

Self-assessment and advance tax are both payable to the government of India depending on the requirements of the Income Tax Act that apply to every one of us. Even if both refer to taxes owed to the government, there is a distinction, and regulations are included in separate parts of the Income Tax Act of 1961. So let’s see the difference between advance tax and self assessment tax.

Advance tax vs self assessment tax:

1) Advance Tax

Advance tax, as the title indicates, is the payment of a percentage of your year's tax burden in advance. If your total liability for the year surpasses 10,000 rupees, then you must pay advance tax on or before the due dates. It's also known as the 'pay as you earn' system because you pay the amount in the year the revenue is received or earned. You will be charged 1% each month for the amount due for the time if you do not pay it depending on the percentage chosen in instalments.

2) Self Assessment Tax

Self-assessment tax refers to your tax liability after deducting tax deducted at source and advance tax. Self-assessment tax is paid on Challan 280 during the assessment year before income tax returns are submitted. The self-assessment tax e-payment tool allows you to make a payment online. You as a taxpayer must have a net-banking feature on your bank account in order to make the payment online. A genuine PAN card number and a TAN number are also required for you as a taxpayer.

What is difference between advance tax and self assessment tax?

The difference between advance tax and self assessment tax must be clear to you now.