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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. 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:

  • An individual
  • Resident in India as per the Income-tax Act
  • Age of 60 years or above at any time during the year
  • Not having any income chargeable to tax under the head “Profits and gains of business or profession”

Illustration

Mr. Karan (resident and age 68 years) is a retired person, earning a rental income of Rs. 50,000 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 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:

  • An individual
  • Resident in India as per the Income-tax Act
  • Age of 60 years or above at any time during the year
  • Not having any income chargeable to tax under the head “Profits and gains of business or profession”

In this case, Mr. Karan is a resident as per Income-tax Law. His age is 68 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. Ramesh (resident and age 55 years) is a retired person, earning rental income of Rs. 50,000 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:

  • An individual
  • Resident in India as per the Income-tax Act
  • Age of 60 years or above at any time during the year
  • Not having any income chargeable to tax under the head “Profits and gains of business or profession”

In this case, Mr. Ramesh is a resident as per Income-tax Law. His age is 55 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. Deepak (resident and age 62 years ) is a retired person earning a rental income of Rs. 50,000 per month. After retirement from his job, he started his own business 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:

  • An individual
  • Resident in India as per the Income-tax Act
  • Age of 60 years or above at any time during the year
  • Not having any income chargeable to tax under the head “Profits and gains of business or profession”

In this case, Mr. Deepak is a resident as per Income-tax Law. His age is 62 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. Rajat (a non-resident and age 63 years) is a retired person, earning a 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:

  • An individual
  • Resident in India as per the Income-tax Act
  • Age of 60 years or above at any time during the year
  • 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 do not have income chargeable to tax under the head “Profits and gains of business or profession”. In this case, Mr. Rajat 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. Rajat will be liable to pay advance tax.

Illustration

XYZ Enterprises, a partnership firm, owns 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 do 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.

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