Section 403 — Liability for payment of advance tax
Old Act equivalent: Sections 207, 208 of IT Act 1961 Sub-part: C.—Advance payment of tax
Statutory Text
- (1) Advance tax shall be payable during any financial year in respect of the current income of the assessee, as per the provisions of this Part.
(2) For the purposes of this Part, “current income” of a tax year means the total income of the assessee which would be chargeable to tax for such tax year.
(3) The provisions of sub-section (1) shall not apply to an individual resident in India, who—
(a) does not have any income chargeable under the head “Profits and gains of business or profession”; and
(b) is of the age of sixty years or more at any time during the tax year.
Sub-sections
Sub-section (1)
Establishes the liability to pay advance tax during the financial year in respect of the current income of the assessee, as per the provisions of Part C of Chapter XIX.
Sub-section (2)
Defines “current income” for advance tax purposes as the total income of the assessee which would be chargeable to tax for the relevant tax year (i.e., estimated total income).
Sub-section (3)
Exemption from advance tax liability for a resident individual who: (a) has no income under the head “Profits and gains of business or profession”, AND (b) is aged 60 years or more at any time during the tax year (senior citizen exemption).
Provisos
None.
Explanations
None.
Tables
None.
Key Structure
- Applies to: All assessees liable to pay income tax during a financial year.
- Conditions: Advance tax payable on current income, being the estimated total income chargeable to tax for the tax year.
- Exceptions: Resident individual aged 60 years or more with no business or profession income is exempt from advance tax under sub-section (3). Both conditions (a) and (b) must be satisfied simultaneously.
Cross-References
- s404 — conditions for advance tax liability (Rs. 10,000 threshold — advance tax payable only if estimated tax liability is Rs. 10,000 or more).
- s405 — computation of advance tax.
- s406 — payment of advance tax on the assessee’s own accord.
- s407 — payment of advance tax pursuant to order of the Assessing Officer.
Amendment Notes
None noted from the extracted pages.
Practical Notes
- This section falls under Part C (Advance payment of tax) of Chapter XIX, distinct from Part B (Deduction and collection at source) which covers TDS/TCS.
- Consolidates old sections 207 (liability for advance tax) and 208 (conditions of liability) into a single provision.
- The senior citizen exemption under sub-section (3) is cumulative — both conditions must be met: (i) no business/profession income AND (ii) age 60+ during the tax year. A senior citizen with business income remains liable for advance tax.
- “Current income” under sub-section (2) is an estimate — the assessee must estimate total income for the tax year and compute advance tax accordingly. Underestimation may attract interest under section 234B/234C equivalents.
- Advance tax is the mechanism for pay-as-you-earn for non-salary income (salary income is covered by TDS under section 392). Capital gains, rental income, interest income, and professional fees (where TDS does not fully cover the tax liability) typically give rise to advance tax obligations.
- Read with section 404 for the Rs. 10,000 threshold — no advance tax if estimated tax liability after TDS/TCS is less than Rs. 10,000.