This question is asked, not to challenge your abilities, but to see how you effectively can answer a difficult question. Answering it with tact and honesty, and being prepared for it in advance, will assist you in sounding confident and professional, not cocky. Remember, people hire who they like!
Some ideas include:
(From an entry level candidate): “While I am newly licensed/graduated, I lack the experience you may find in someone more seasoned. However, what I lack in time in this career, I make up for in (SHARE STRENGTHS HERE).
(From someone with heavy experience/potentially overqualified): “While at first glance, I may seem overqualified for this position, I can provide you with flexible hours, a great deal of firsthand experience, and understand the salary range for the position. I am interested in becoming a long term player within the organization.”
Other ways to answer the question include sharing what you have done to overcome a professional weakness, or how you work now on improving an area which requires a little extra. If you research the position and find a minor area where you can be trained, that may be a good discussion point.
Please don’t tell me you are a perfectionist. That isn’t a weakness. It’s arrogance!