Income Tax Senior Citizen: If a taxpayer’s net tax liability after deducting TDS/TCS exceeds Rs. 10,000, they must pay advance tax. Advance tax is paid in four installments. The first installment must be paid by January 15, the second by September 15, the third by December 15, and the fourth by March 15.
Many senior citizens earn income from pensions. Some also earn income from long-term capital gains. The question is, is it necessary for a senior citizen to pay advance tax if their income consists solely of pension, bank interest, equity, and LTCG/STCG, and they do not have any business income such as F&O or intraday gains? If I have ₹1 lakh in LTCG/STCG in each of the three quarters of a financial year and a loss of ₹2 lakh in the last quarter, how is my advance tax calculated? Moneycontrol asked this question to renowned tax expert and CA Balwant Jain.
Advance Tax Payment Rules
Jain said that if a taxpayer’s net tax liability after deducting TDS/TCS exceeds ₹10,000, they must pay advance tax. According to Income Tax rules, advance tax is paid in four installments. The first installment must be paid by January 15, the second by September 15, the third by December 15, and the fourth by March 15. However, taxpayers aged 60 or older (senior citizens) are exempt from paying advance tax, provided they do not have any taxable income under the head “profits or gains from business or profession.”
Relief for Senior Citizens
He stated that senior citizens do not need to pay advance tax if they do not have any taxable income from profits or gains from business or profession. They can pay the full tax before the deadline for filing their income tax return. Regarding the second part of the question, if you have a capital gain of ₹1 lakh per quarter in the first three quarters of the financial year and a loss of ₹2 lakh in the last quarter, the loss will be adjusted on a FIFO basis.
Tax if you are not a senior citizen
This means that assuming you are not a senior citizen, you will incur an advance tax liability on the ₹1 lakh gain in the third quarter. Interest will be charged accordingly. If you are a senior citizen, you will not have to pay any advance tax installment, regardless of the amount of capital gains you make during the financial year.
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