Self-assessment in income tax is a system used by HM Revenue and Customs (HMRC) to collect income tax from individuals and businesses with other income that is not automatically deducted from wages and pensions. Taxpayers are required to report their income and calculate their own tax liability for the tax year and include this on their tax return. Self-assessment tax arises when the tax paid on account of TDS/TCS/advance tax is less than the actual tax liability.

Here are the key steps involved in self-assessment tax:

• Registering for Self Assessment: If an individual identifies that they need to file a Self Assessment tax return for a particular tax year, they should register with HMRC. The deadline for registering is 5th October of the calendar year in which that tax year ended.

• Filling in your return: You need to keep records (for example bank statements or receipts) so you can fill in your tax return correctly. You can get help filling in your return.

• Paying your bill: HMRC will calculate what you owe based on what you report. Pay your Self Assessment bill by 31 January. How much tax you pay will depend on the Income Tax band you’re in.

There are different types of assessments in income tax, including self-assessment, assessment without human intervention, scrutiny assessment, and best judgment assessment.

If you need to send a Self Assessment tax return, fill it in after the end of the tax year (5 April) it applies to. You must send a return if HMRC asks you to. You may have to pay interest and a penalty if you do not file and pay on time.