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Senior Citizens not having Business Income exempt From Advance tax

As per section 208 every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of advance tax. Thus, any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard.

As per section 208 every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of “advance tax”. Thus, any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, as per section 207, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax.

In other words, if a person satisfies the following conditions, he 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

3) He is of the age of 60 years or above at any time during the year

4) He is not having any income chargeable to tax under the head “Profits and gains of business or profession”

Illustration

Mr. Kapoor (resident and age 65 years) is a retired person, earning rental income of Rs. 40,000 per month. Apart from rental income, he does not have any other source of income. Will he be liable to pay advance tax?

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Any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, if a person satisfies the following conditions, he 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

3) He is of the age of 60 years or above

4) He is not having any income chargeable to tax under the head “Profits and gains of business or profession”

In this case Mr. Kapoor is a resident as per Income-tax Law. His age is 65 years and he is not having any income chargeable to tax under the head “Profits and gains of business or profession”. Thus, he satisfies all the above conditions and, hence, he will not be liable to pay advance tax.

Illustration

Mr. Sunil (resident and age 56 years) is a retired person, earning rental income of Rs. 40,000 per month. Apart from rental income he does not have any other source of income. Will he be liable to pay advance tax?

**

Any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay tax in advance by the due dates prescribed in this regard. However, if a person satisfies the following conditions, then he 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

4) He is of the age of 60 years or above

5) He is not having any income chargeable to tax under the head “Profits and gains of business or profession”

In this case Mr. Sunil is a resident as per Income-tax Law. His age is 56 years and he is not having income chargeable to tax under the head “Profits and gains of business or profession”. He satisfies all the conditions except the age criteria of 60 years and, hence, he will be liable to pay advance tax. In other words, Mr. Sunil is not a senior citizen as per the Income-tax Law and, hence, he is not exempted from payment of advance tax.

Illustration

Mr. Mohan (resident and age 61 years ) is a retired person earning rental income of Rs. 40,000 per month. After retirement from his job, he started his own business of provision shop. Will he be liable to pay advance tax?

**

Any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, if a person satisfies the following conditions, then he 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

3) He is of the age of 60 years or above

4) He is not having any income chargeable to tax under the head “Profits and gains of business or profession”

In this case Mr. Mohan is a resident as per Income-tax Law. His age is 61 years and he is having income chargeable to tax under the head “Profits and gains of business or profession”. He satisfies all the conditions except the business/profession income criteria. Hence, he will be liable to pay advance tax. In other words, Mr. Mohan will be liable to pay advance tax because he is having income chargeable to tax under the head “Profits and gains of business or profession”.

Illustration

Mr. Raja (a non-resident and age 63 years) is a retired person, earning rental income of Rs. 40,000 per month from a property located in Delhi. He is residing in Canada. Apart from rental income, he does not have any other source of income. Will he be liable to pay advance tax in India?

**

Any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, if a person satisfies the following conditions, he 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

3) He is of the age of 60 years or above

4) He is not having any income chargeable to tax under the head “Profits and gains of business or profession”

The exemption from payment of advance tax is available to a resident individual who is of the age of 60 years or above and who does not have income chargeable to tax under the head “Profits and gains of business or profession”. In this case, Mr. Raja is a non­resident as per Income-tax Law, and, hence, he cannot claim the benefit of exemption from payment of advance tax. In other words, Mr. Raja will be liable to pay advance tax.

Illustration

Essem Enterprises, a partnership firm, owns a property in Delhi. The property is given on rent of Rs. 40,000 per month. Apart from rental income, the firm is not having any source of income. Will the firm be liable to pay advance tax?

**

The exemption from payment of advance tax is available to a resident individual who is of the age of 60 years or above and who does not have income chargeable to tax under the head “Profits and gains of business or profession”. In this case, the taxpayer is a partnership firm and, hence, the exemption will not apply to it, thus, the firm will be liable to pay advance tax.

(Republished with Amendments)

Categories: Income Tax

View Comments (13)

  • I have a query that if a senior citizen is getting a salary from teaching in Govt shool,
    Will his employer liable to deduct TDS on his salary or will he be expmoted as per Section 208/207
    Total taxable Income may 8 -10 lakh per annum
    "He is not having any income chargeable to tax under the head “Profits and gains of business or profession”

    Needed Clarity on the same, Please reveiw and suggest

  • A senior citizen is having share of profits from firm as he is a partner. Since share of profits from firm is exempt in the hands of the partner, even though the amount is chargeable to tax under head "PGBP", it is exempt u/s 10(2A) meaning business income is eventually NIL.
    In this circumstance, is advance tax liable considering Other taxable income is more than 10000?

  • if a person is retired, have pension and also employed in private sector and has rental income. does he have to pay advance tax?

  • Can you please clarify if I am RNOR, (Resident but not Ordinary Resident) and a senior citizen and no income other than Interest on NRE FD and SCSS and GOI Bonds on which tax implication is more than INR 10,000, Am I exempted from paying advance tax?

  • I am retired person. my age is 61. No pension. I invest my retirement benefits VPF,Grtituty etc in Bank Fixed deposit and get Rs.610000/- per annum. Shall I pay advance tax? I submit for H in bank . iam self assessment . Can I pay income tax at the time of filling returns .Please advice . Because last date is 15.9.18

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