TaxSaral

Section 403 · was Section 207 in the 1961 Act

Senior Citizens Exempt from Advance Tax

A resident individual aged 60+ with no business/profession income is not required to pay advance tax. Their full tax liability can be paid as self-assessment tax at the time of filing.

Who it applies to: Resident individuals aged 60 years or above who have only salary, pension, rent, or investment income — no business income.

Key points

  • The exemption is unconditional for qualifying senior citizens — even if the tax liability is ₹5L or more.
  • If a senior citizen has ANY business income (even a small commission or consultancy), they lose this exemption.
  • Self-assessment tax is paid along with the ITR — no penalty for not paying advance tax if you qualify.
  • The interest saving can be significant: no Section 234B or 234C interest applies.

Worked example

Retired couple with large FD and dividend income

Rajesh (68) and his wife Shobha (65) are retired. Their income: pension ₹3L each, FD interest ₹2L each, dividends ₹1L each. Total: ₹6L each. No business income.

Both qualify for senior citizen advance tax exemption (no business income, both 60+).

For each of them:
  Total income (before deductions): ₹6,00,000
  Section 153 deduction: – ₹50,000 (FD interest)
  Net taxable income: ₹5,50,000
  Tax: 5% × ₹1,50,000 = ₹7,500 (above ₹4L nil slab)
  Plus cess: ₹7,800

They pay ₹7,800 each as self-assessment tax at ITR filing.
No quarterly payments, no Section 234B/234C interest.

Result: Rajesh and Shobha have no quarterly advance tax obligations. They simply pay ₹7,800 each when filing their ITR, typically by July 31. The exemption eliminates the cash flow burden of quarterly tax payments.

Related sections

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Section references are based on the Income Tax Act 2025 (Tax Year 2026-27). Examples are illustrative; verify with a Chartered Accountant before filing.