An individual whose tax liability is anticipated to exceed Rs 10,000 in a particular fiscal year is liable to pay advance taxes. The government has stipulated a deadline for each quarter by which individuals are required to pay the advance taxes.
However, in the case of senior citizens, there are certain relaxations about this particular rule. For senior citizens, the following criteria have been mandated for their eligibility for exemption from advance taxes. In case an individual meets the following criteria, they are not liable to pay advance taxes.
An individual should be an Indian resident, aged 60 or above, and does not have any earnings under the gains from business or profession.
This means that if an individual is a retiree and earns regular pension income, they do not have to pay advance taxes. The pension income comes after tax is deducted at source (TDS). So, an individual does not have to worry about taxes at all unless at the year’s end.
At the time of year-end, such an individual has to file the returns. Taxation for salaried individuals or retirees who do not have other sources of income except pension income does not have to worry about paying advance tax.
However, if an individual earns money through business or by profession, they should pay taxes in advance. It is important to consider the proportion of taxes and the deadline for seriously filing advance taxes while adhering to the rules.
The tax amount for an individual depends on the government policies on tax exemption and the deduction allowed in their case. Ideally, make full use of deductions to lower the tax liability. It is important to note that business or professional income is quite different from income from salary.
To calculate advance tax, an individual can estimate the expected total income from business and profession for the relevant financial year and deduct all expenses, such as travel expenses, phone bills, etc.
After this, add income from other sources except income from salary. In case the tax on total income estimation after adjusting the eligible deduction benefits exceeds Rs 10,000, an individual is liable to pay the advance tax.
In case of any confusion related to financial matters or filing taxes, it is always advisable to seek the services of a tax expert or a chartered accountant.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.