Is a Resident senior citizen granted exemption from payment of advance tax (Income tax)? ||Advance Tax on Senior Citizen

Payment of advance tax on Senior Citizen

Payment of advance tax–As per section 208 of Income Tax Act, every person whose estimated tax liability for the year is 10,000 Rupees. or more, shall pay his tax in advance, in the form of “advance tax“. However, section 207 of income tax act gives relief from payment of advance tax to a resident senior citizen. As per section 207​ ot this act a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from profession and business , is not liable to pay advance tax.

Section 208 of Income Tax Act

As per section 208 of Income Tax Act, every person whose estimated tax liability for the year is 10,000 rupees or more, shall pay his tax in advance, in the form of “advance tax”.

Section 207 of Income Tax Act

According to Section 207 of Income Tax Act, a resident senior citizen (an individual of age 60 years or more) who does not have any income from business or profession is not liable to pay advance tax.

Illustration-I

Mr. Sharma (age 64 years and resident) is a retired person, earning rental income of 40,000 Rupees per month. A part from rental income, he does not have any other source of income.

Will Mr. Sharma be liable to pay advance tax?

Any taxpayer whose estimated tax liability for the year exceeds 10,000 rupees has to pay his tax in advance by the due dates prescribed in this regard. However, if a person satisfies the following conditions, Mr. Sharma will not be liable to pay advance tax:

1) He is an individual

2) He is resident in India as per the Income tax Act 1961

3) He is of the age of 60 years or above (senior citizen)

4) He is not having any income from business or profession profession”

In this case Mr. Sharma is a resident as per Income tax Act. His age is 64 years and he  does not have any income from business or profession profession”.

Thus, Mr. Sharma satisfies all the above conditions and, hence, he will not be liable to pay advance tax.

Illustration 2

Mr. Rakesh (resident and age 57 years) is a retired person, earning rental income of 45,000 Rupees per month. Apart from rental income he does not have any other source of income.

Will Mr. Rakesh be liable to pay advance tax?

Any taxpayer whose estimated tax liability for the year exceeds 10,000 Rupees has to pay tax in advance by the due dates prescribed in this regard. However, if a person satisfies the following conditions, then Mr. Rakesh will not be liable to pay advance tax:

1) He is an individual

2) He is resident in India as per the Income tax Act 1961

3) He is of the age of 60 years or above (senior citizen)

4) He does not have any income from business or profession profession”.

In this case Mr. Rakesh is a resident as per Income-tax Act 1961, Rakesh age is 57 years and he is not having income chargeable to tax under the head “Profits and gains of business or profession”.

Mr. Rakesh satisfies all the conditions except the age criteria of 60 years and, hence, rakesh will be liable to pay advance tax. In other words, Mr. Rakesh is not a senior citizen as per the Income-tax Act 1961 and, hence, he is not exempted from payment of advance tax.

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