{"id":21257,"date":"2023-10-11T11:41:36","date_gmt":"2023-10-11T06:11:36","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/new-learn?p=21257"},"modified":"2026-01-30T14:24:20","modified_gmt":"2026-01-30T08:54:20","slug":"senior-citizens-constantly-filing-salary-returns-are-not-liable-to-advance-tax","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/senior-citizens-constantly-filing-salary-returns-are-not-liable-to-advance-tax\/","title":{"rendered":"Senior Citizens Constantly Filing Salary Returns are Not Liable to Advance Tax"},"content":{"rendered":"

The Indian tax system<\/strong> is a complex web of regulations, provisions, and exemptions. One such exemption that holds immense significance for senior citizens<\/strong> in the country is the waiver from paying advance tax. As per Section 207 of the Income Tax Act, 1961, this exemption extends to resident individuals aged 60 or above who do not earn income classified under the head \u201cprofit and gains from business or profession.\u201d In simpler terms, senior citizens who receive income primarily from salary, pension, interest, or rent are not required to pay advance tax, irrespective of income or tax liability.<\/span><\/p>\n

In this extensive exploration, we delve into the rationale behind this exemption, analyze a landmark case law \u2013 Jayantilal D Ray v. DCIT \u2013 that validates this exemption, and comprehensively examine its implications and benefits to senior citizens who consistently file salary returns.<\/span><\/p>\n

Understanding Advance Tax<\/b><\/h2>\n

Advance tax<\/strong><\/a> is a system of paying income tax in instalments throughout the financial year instead of paying it as a lump sum at the end of the year. Advance tax applies to individuals with income sources other than salary, such as rent, interest, capital gains, lottery winnings, etc. Advance tax is also known as \u201cpay as you earn\u201d tax, paid as the income is earned during the year.<\/span><\/p>\n

The purpose of advance tax is to ensure that the government gets a steady flow of revenue throughout the year and that the taxpayers do not face a huge tax burden at the end of the year. Advance tax also helps taxpayers plan their finances and avoid penalties and interest for late tax payments.<\/span><\/p>\n

The advance tax payment is made in four instalments during the year, per the due dates specified by the income tax department. The advance tax liability is calculated based on the year\u2019s estimated income and tax rates. The advance tax payment can be made online through the e-filing portal of the income tax department or certain banks.<\/span><\/p>\n

Senior citizens who do not have any income from business or profession are exempt from paying advance tax, irrespective of their income or tax liability. Similarly, taxpayers who have opted for a presumptive taxation scheme under section 44AD or 44ADA can pay their entire advance tax liability in one instalment on or before 15 March or 31 March.<\/span><\/p>\n

Who Are Senior Citizens in This Context?<\/b><\/h2>\n

According to the Income Tax Act 1961<\/strong><\/a>, advance tax is a mechanism to collect tax in instalments throughout the year, based on the estimated income of the taxpayer. However, there is an exemption from payment of advance tax for resident senior citizens as per section 207 of the Act. This means that a resident individual who is of the age of 60 years or more at any time during the previous year and who does not have any income chargeable under the head \u201cprofit and gains from business or profession\u201d is not required to pay advance tax. This is a relief measure for senior citizens who have income from sources other than business or profession, such as salary, pension, interest, rent, etc. This saves them from the hassle and uncertainty of calculating their income and tax liability in advance and also spares them from the interest and penalty for default or delay in payment of advance tax. They only have to pay their final tax liability when filing their return.<\/span><\/p>\n

Rationale Behind the Exemption<\/b><\/h3>\n

The rationale behind the exemption from payment of advance tax for resident senior citizens who do not have income from business or profession is to provide relief and convenience to elderly taxpayers. Advance tax is a mechanism to collect tax in instalments throughout the year, based on the estimated income of the taxpayer. However, this mechanism may not be suitable for all categories of taxpayers, especially senior citizens who do not have income from business or profession.\u00a0<\/span><\/p>\n

Senior citizens who do not have income from business or profession may have fixed and regular sources of income, such as pension, interest, rent, etc., which are subject to tax deduction at source (TDS)<\/strong><\/a> by the payer. TDS is a system where the payer deducts a certain tax percentage before paying the recipient. Therefore, senior citizens who do not have income from business or profession may not have any significant tax liability at the end of the year, as most of their income may be already taxed at source.\u00a0<\/span><\/p>\n

Paying advance tax may cause hardship and inconvenience to them, as they may have to estimate their income and tax liability in advance and pay it in instalments throughout the year. They may also struggle to maintain records and proof of their income and expenses. Moreover, they may end up paying more or less than their actual tax liability due to variations in their income or changes in tax rates or slabs.\u00a0<\/span><\/p>\n

Hence, the exemption from payment of advance tax is a relief measure for senior citizens who do not have income from business or profession. It spares them from the hassle and uncertainty of paying advance tax and allows them to pay their final tax liability only when they file their return.<\/span><\/p>\n

Income from Fixed and Regular Sources<\/b><\/h3>\n

Senior citizens without business or profession often rely on income generated from fixed and regular sources. These sources typically include:<\/span><\/p>\n