Clarification on Advance Tax Liability in case of Senior Citizen Individual

[Lalitha Krishnamurthy]

Respected Sir/Ma'am,

We seek your guidance regarding the applicability of advance tax provisions in the case of a senior citizen under the following circumstances:

1. Where a senior citizen individual is a partner in a partnership firm and derives income in the form of share of profit, which is exempt under Section 10(2A) of the Income-tax Act, 1961 and does not have any taxable income chargeable under the head 'Profits and Gains of Business or Profession' (PGBP) in his individual capacity; or

2. Where a senior citizen individual incurs a business loss during a particular financial year but does not have any taxable income chargeable under the head 'Profits and Gains of Business or Profession' (PGBP) in his individual capacity.

In the above situations, we request your clarification on whether such an individual would be liable to pay advance tax under Section 208 of the Income-tax Act, 1961.

We look forward to your valuable guidance on the matter.

[FCA Adv amit aggarwal]

Neeta Rohit Patel vs DCIT - 2021 (8) TMI 5 - ITAT MUMBAI

The Mumbai ITAT held that:

• assessee was a senior citizen,
• income included exempt share profit from partnership firm u/s 10(2A),
• no other taxable PGBP income existed,
• therefore Sections 234B and 234C interest were not leviable.

1. liability of advance tax tax shall not arise and also interest thereon

2. also in case of loss, liability of advance tax tax shall not arise and also interest thereon

AI Summary

Advance tax liability for senior citizens may not arise where only exempt partnership income or business loss exists. Advance tax liability for a senior citizen individual is considered where income consists only of exempt share of profit from a partnership firm under Section 10(2A) and no taxable PGBP income exists in the individual's hands. The discussion also covers a case of business loss with no taxable PGBP income. The stated position is that advance tax liability under Section 208 does not arise, and consequential interest for default in advance tax is also not leviable.