(2021)Is Advance Tax Payment By Senior Citizen Mandatory?

Advance Tax Payment for Senior Citizen–Is it mandatory?

To ease the pains of the senior citizens, the Government of India has kept on bringing in different rules, regulations and relaxation norms for them.

It has been a continuous endeavour of the Govt. to ensure that the people belonging to the age of sunset years are not overburdened with the income tax laws. Also, they should not be very much worried as the taxation norms has been kept minimalistic.

A glimpse of such relaxation we have seen in the Finance Budget 2021 regarding requirement of non-filing of Income Tax return for the super senior citizens.

Requirement of Advanced Tax Payment by Senior Citizens:

As per the provisions of Section 208, every assessee has to make an estimate of his prospective income during the current financial year and calculate tax liability and pay advance tax accordingly only if such tax liability for the year exceeds ₹10,000/-.

Further, as per Section 207 of the Income Tax Act, a senior citizen is not liable to pay advance income tax unless he/she has income from Business and Professions.

Advance Tax Payment for Senior Citizen–Is it mandatory?

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Therefore to be liable for payment of advance income tax a senior citizen must fulfil the condition of having income under the head Business and Professions.

In most of the cases, we have seen that senior citizens having only income from pension and or Bank interest from the savings account and from FD, ask queries regarding payment of advance income tax.

But the income tax laws are kind enough not to consider the above income as a criterion for payment of advance tax by senior citizens.

Key income tax benefits for the Senior Citizens:

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• Higher basic income tax exemption limit of ₹3,00,000 for senior citizens;
• Deduction benefit up to ₹50,000 for income from interest paid by Banks, Post Office and Cooperative Banks as per Section 80TTB of the Income Tax Act;
• Higher TDS limit for senior citizens up to ₹50,000 for payment of interest by Banks U/S 194A of the Income Tax Act;
• Higher medical insurance premium benefits up to ₹50,000 for senior citizens as per section 80D of the Income Tax Act;
• A senior citizen is not required to pay advance income tax even if his total tax liability for the financial year exceeds ₹10,000 in a year(unless he has an income from business or Profession).

What is Advance Tax Payment?

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When any tax is paid upfront like “pay as and when you earn it“, without waiting for the year end’s total tax liability, this is termed as an advance tax payment.

In case of advance tax payment, the overall tax liability is not paid at the year-end, rather based on your anticipated future total income, you have to pay advance tax in four instalments during the financial year accordingly.

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Who is liable to advance tax payment as per Section 208 of the Income Tax Act?

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• Every assessee whose annual tax liability exceeds ₹10,000/- in a year, is liable to pay advance income tax as per Section 208 of the Income Tax Act;
• While calculating the liability for payment of advance tax, one can take advantage of the deduction exemption U/S 80 accordingly;
• But as per Section 207, a resident senior citizen is not liable to advance income tax payment, if he doesn’t have income from the Business or Profession even if his/her total tax liability exceeds ₹10,000/- in a year;
• A small taxpayer assessee liable to pay tax as per the presumptive income scheme U/S 44AD is also liable to pay advance income tax.
• An NRI is also liable to pay advance income tax as per the income tax rules.

Advance Tax Payment Dates/Advance Tax Dates

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The following are the due dates for payment of the advance tax for the individual and corporate assessee.

Advance Tax Payable	Due Dates
15% of advance tax	On or before 15th June
45% of cumulative advance tax	On or before 15th September
75% of cumulative advance tax	On or before 15th December
100% of total tax liability	On or before 15th March

The due date for payment of the advance tax for the small taxpayers having presumptive income U/S 44AD.

Advance Tax Payable	Due Dates
100% of total advance tax liability	On or before 15th March

Key points to remember on Advance Tax Payment

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FAQs on Advance Tax Payment

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