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CA Intermediate · Taxation · Tax Deduction or Collection at Source and Advance Tax

Mrs. Lalitha Rao, aged 66 years, is a resident in India for tax year 2026-27. Her income consists only of pension from a former employer and interest on bank deposits. After allowing TDS already deducted, her estimated tax payable for the year is Rs 18,000. Which statement about her advance tax liability is correct?

Mrs. Rao need not pay advance tax. Although her net tax payable of Rs 18,000 exceeds the Rs 10,000 threshold, a resident individual aged 60 or above with no business or professional income is exempt from advance tax. She can pay the balance as self-assessment tax when filing her return.

  1. AShe must pay advance tax in four instalments because the tax payable is Rs 10,000 or more
  2. BShe is not required to pay advance tax because she is a resident senior citizen with no income from business or professionCorrect
  3. CShe must pay the whole Rs 18,000 by 15 March only
  4. DShe must pay advance tax only if her pension exceeds Rs 5,00,000

Explanation

Advance tax applies when the tax payable after TDS is Rs 10,000 or more, so Rs 18,000 would normally attract it. However, a resident individual aged 60 or more who has no income chargeable under the head business or profession is exempt from advance tax. Mrs. Rao has only pension and interest, so she is exempt. The first option ignores this exemption, and the third applies to presumptive business taxpayers.

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