Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live, central. Requires the assessee, before furnishing the return, to pay the tax (with interest under sections 234A/234B/234C and fee under 234F) due on the basis of the return after giving credit for TDS/TCS, advance tax, relief and MAT/AMT credit; prescribes the order of appropriation and deems an unpaid self-assessment-tax assessee to be in default.
FA 2026: No substantive amendment by the Finance Act, 2026.
History: The penalty provision in the former sub-section (3) for default in payment of self-assessment tax was the subject of constitutional challenge and was ultimately omitted; default now attracts 'assessee-in-default' consequences and interest under section 220.
A. SECTION COMMENTARY
Section 140A operationalises the self-assessment principle: tax admitted as payable on the return must be paid before filing, together with statutory interest and fee, and the return must be accompanied by proof of payment. Sub-section (1) prescribes the order in which a part-payment is appropriated — first to fee, then interest, then tax — a sequence of practical importance when the assessee pays less than the full admitted liability.
Sub-section (1A)/(1B) deal with interest computation; sub-section (3) treats an assessee who fails to pay the self-assessment tax (wholly or partly) as an assessee in default in respect of the unpaid amount, attracting the recovery and interest machinery. The earlier penal sub-section (3) (penalty for non-payment) was struck down by the High Courts as unconstitutional and the provision was recast; the present consequence is interest and default-recovery, not penalty.
The interest charges referred to in section 140A (sections 234A-234C) are mandatory and compensatory, leaving no discretion once the conditions are met.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section;
(v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD; and
(vi) any tax or interest payable according to the provisions of sub-section (2) of section 191, the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax, interest and fee.
Explanation.—Where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax , interest and fee as aforesaid, the amount so paid shall first be adjusted towards the fee payable and thereafter towards the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable.
(1A) For the purposes of sub-section (1), interest payable,—
(i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the amount of,—
(c) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(d) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(e) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD;
(ii) under section 115WK shall be computed on the amount of tax on the value of the fringe benefits as declared in the return as reduced by the advance tax, paid, if any.
(1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax.
Explanation.—For the purposes of this sub-section, "assessed tax" means the tax on the total income as declared in the return as reduced by the amount of,—
(i) tax deducted or collected at source, in accordance with the provisions of Chapter XVII, on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
(ii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(iii) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(iv) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD.
(2) After a regular assessment under section 115WE or section 115WF or section 143 or section 144 or an assessment under section 153A or section 158BC has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment or assessment, as the case may be.
(3) If any assessee fails to pay the whole or any part of such tax, interest or fee in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax, interest or fee remaining unpaid, and all the provisions of this Act shall apply accordingly.
(4) The provisions of this section as they stood immediately before their amend-ment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.
C. AUTHORITIES
The authorities concern the mandatory character of the interest payable on self-assessment and the (historic) invalidity of the former penalty.
Held: Interest under sections 234A, 234B and 234C is mandatory and compensatory; the levy is automatic and not in the discretion of the authority, and even the Settlement Commission cannot waive or reduce it except as the statute permits.
Relevance: The interest that section 140A requires to be paid with self-assessment tax is governed by this mandatory-levy principle; there is no discretion to relieve it at the self-assessment stage.
Position: Where the amount paid falls short of the aggregate of tax, interest and fee, section 140A(1) mandates appropriation first towards fee, then interest, and the balance towards tax; the unpaid tax then carries forward as a default. This statutory sequence governs and cannot be re-ordered by the assessee's appropriation.
Candour note: The appropriation rule is statutory and clear; there is little contested case law on it.
2. The former penalty under section 140A(3) — historic
A.M. Sali Maricar v. ITO (1973) 90 ITR 116 (Mad.) [Full Bench] — historic
Court: Madras High Court (Full Bench).
Held: The former section 140A(3), which imposed a penalty for failure to pay self-assessment tax, was held to be violative of the (then) Article 19(1)(f) and unconstitutional.
Status note: Of historical interest only: the impugned penalty provision was omitted and the section recast; default in paying self-assessment tax now attracts assessee-in-default consequences and interest, not the struck-down penalty. Reproduced to explain the legislative history of sub-section (3).
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; orders of the Tribunal, Authority for Advance Rulings and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 140A — Self-Assessment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live, central. Requires the assessee, before furnishing the return, to pay the tax (with interest under sections 234A/234B/234C and fee under 234F) due on the basis of the return after giving credit for TDS/TCS, advance tax, relief and MAT/AMT credit; prescribes the order of appropriation and deems an unpaid self-assessment-tax assessee to be in default.
FA 2026: No substantive amendment by the Finance Act, 2026.
History: The penalty provision in the former sub-section (3) for default in payment of self-assessment tax was the subject of constitutional challenge and was ultimately omitted; default now attracts 'assessee-in-default' consequences and interest under section 220.
A. SECTION COMMENTARY
Section 140A operationalises the self-assessment principle: tax admitted as payable on the return must be paid before filing, together with statutory interest and fee, and the return must be accompanied by proof of payment. Sub-section (1) prescribes the order in which a part-payment is appropriated — first to fee, then interest, then tax — a sequence of practical importance when the assessee pays less than the full admitted liability.
Sub-section (1A)/(1B) deal with interest computation; sub-section (3) treats an assessee who fails to pay the self-assessment tax (wholly or partly) as an assessee in default in respect of the unpaid amount, attracting the recovery and interest machinery. The earlier penal sub-section (3) (penalty for non-payment) was struck down by the High Courts as unconstitutional and the provision was recast; the present consequence is interest and default-recovery, not penalty.
The interest charges referred to in section 140A (sections 234A-234C) are mandatory and compensatory, leaving no discretion once the conditions are met.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
140A. (1) Where any tax is payable on the basis of any return required to be furnished under section 115WD or section 115WH or section 139 or section 142 or section 148 or section 153A or, as the case may be, section 158BC, after taking into account,—
(i) the amount of tax, if any, already paid under any provision of this Act;
(ii) any tax deducted or collected at source;
(iia) any relief of tax claimed under section 89;
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section;
(v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD; and
(vi) any tax or interest payable according to the provisions of sub-section (2) of section 191, the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax, interest and fee.
Explanation.—Where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax , interest and fee as aforesaid, the amount so paid shall first be adjusted towards the fee payable and thereafter towards the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable.
(1A) For the purposes of sub-section (1), interest payable,—
(i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the amount of,—
(a) advance tax, if any, paid;
(b) any tax deducted or collected at source;
(ba) any relief of tax claimed under section 89;
(c) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(d) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(e) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD;
(ii) under section 115WK shall be computed on the amount of tax on the value of the fringe benefits as declared in the return as reduced by the advance tax, paid, if any.
(1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax.
Explanation.—For the purposes of this sub-section, "assessed tax" means the tax on the total income as declared in the return as reduced by the amount of,—
(i) tax deducted or collected at source, in accordance with the provisions of Chapter XVII, on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
(ia) any relief of tax claimed under section 89;
(ii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(iii) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(iv) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD.
(2) After a regular assessment under section 115WE or section 115WF or section 143 or section 144 or an assessment under section 153A or section 158BC has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment or assessment, as the case may be.
(3) If any assessee fails to pay the whole or any part of such tax, interest or fee in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax, interest or fee remaining unpaid, and all the provisions of this Act shall apply accordingly.
(4) The provisions of this section as they stood immediately before their amend-ment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.
C. AUTHORITIES
The authorities concern the mandatory character of the interest payable on self-assessment and the (historic) invalidity of the former penalty.
1. Mandatory interest; appropriation
CIT v. Anjum M.H. Ghaswala (2001) 252 ITR 1 (SC) [Constitution Bench] — cognate
Held: Interest under sections 234A, 234B and 234C is mandatory and compensatory; the levy is automatic and not in the discretion of the authority, and even the Settlement Commission cannot waive or reduce it except as the statute permits.
Relevance: The interest that section 140A requires to be paid with self-assessment tax is governed by this mandatory-levy principle; there is no discretion to relieve it at the self-assessment stage.
Order of appropriation — section 140A(1)
Position: Where the amount paid falls short of the aggregate of tax, interest and fee, section 140A(1) mandates appropriation first towards fee, then interest, and the balance towards tax; the unpaid tax then carries forward as a default. This statutory sequence governs and cannot be re-ordered by the assessee's appropriation.
Candour note: The appropriation rule is statutory and clear; there is little contested case law on it.
2. The former penalty under section 140A(3) — historic
A.M. Sali Maricar v. ITO (1973) 90 ITR 116 (Mad.) [Full Bench] — historic
Court: Madras High Court (Full Bench).
Held: The former section 140A(3), which imposed a penalty for failure to pay self-assessment tax, was held to be violative of the (then) Article 19(1)(f) and unconstitutional.
Status note: Of historical interest only: the impugned penalty provision was omitted and the section recast; default in paying self-assessment tax now attracts assessee-in-default consequences and interest, not the struck-down penalty. Reproduced to explain the legislative history of sub-section (3).
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; orders of the Tribunal, Authority for Advance Rulings and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.