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

Advance Tax Payment for Senior CitizenIs 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.

Is Advance Tax Payment By Senior Citizen Mandatory?

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 CitizenIs it mandatory?


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:


  • 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?


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.

You may want to read the below posts:

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


  • 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


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

Advance Tax PayableDue Dates
15% of advance taxOn 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 liabilityOn 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 PayableDue Dates
100% of total advance tax liabilityOn or before 15th March

Key points to remember on Advance Tax Payment


  • Advance tax payment is mandatory for an assesse if this total tax liability exceeds ₹10,000/- in a year;
  • A senior citizen is not liable to pay advance income tax even if his annual income tax liability exceeds ₹10,000/-;
  • If a senior citizen has received an income from his/her business or profession, he/she is liable to advance income tax payment;
  • The amount of advance income tax is calculated based on the applicable income tax slabs considering the prospective income during the financial year;
  • Advance income tax is payable in 4 instalments i.e. within 15th June, 15th September, 15th December and final instalment on or before 15th March;
  • An assessee who is having a presumptive income scheme shall pay his advance tax liability with 31st March in one instalment only;
  • If one fails to deposit the advance income tax within the above-mentioned advance tax dates, penal interest @1% will be charged U/S 234B and 234C respectively;

FAQs on Advance Tax Payment


  • Is the payment of advance tax compulsory?
  • :Yes, payment of advance tax is compulsory. Advance income tax payment forms a formidable part of the Government’s revenue. Therefore, whenever your annual tax liability exceeds ₹10,000/-, you must pay advance tax within the due dates. But payment of advance income tax is not compulsory for a senior citizen as per Section 207 of the Income Tax Act.
  • Who is liable for advance tax?
  • :-As per Section 207 of the Income Tax Act, every assessee is liable for advance tax payment only if his total tax liability exceeds ₹10,000/- in a year.
  • When should I pay advance tax?
  • :-Advance tax payment is to be made as per the following dates and manner: 15th June-15% of the total tax liability, 15th September- 45% of the total tax liability, 15th December-75% of the total tax liability and within 15th March-100% of the total tax liability. However, one can pay the 4th instalments by 31st March without any penalty being charged.
  • Will I be penalized if I do not pay advance tax?
  • Yes, of course, you will be penalised if you fail to deposit advance tax within the advance tax due dates. A penal interest rate of 1% will be charged as per the provisions of Section 234B and 234C respectively.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.