CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 208 - Conditions of Liability to Pay Advance Tax
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Live. The monetary threshold (Rs. 10,000) that triggers the advance-tax obligation.
Finance Act, 2026: No amendment.
Mechanism: Advance tax is payable only where the advance tax computed under the Chapter is ten thousand rupees or more (threshold substituted by the Finance Act, 2009 for Rs. 5,000).
Litigation profile: Mechanical; rarely litigated on its own text. Disputes arise on the inputs (section 209) and the interest (section 234B/234C), not on the threshold figure.
A. SECTION COMMENTARY
Section 208 fixes the threshold of liability. Advance tax is payable in a financial year only where the amount of such tax payable by the assessee during that year, computed under the Chapter, is ten thousand rupees or more. Below that figure no advance tax is due, and correspondingly no interest under section 234B/234C can be charged for not paying it. The threshold is a single, all-or-nothing trigger: once the computed advance tax reaches ten thousand rupees, the whole of it (in the prescribed instalments) becomes payable, not merely the excess over the threshold.
The figure and its history
The present threshold of ten thousand rupees was substituted by the Finance Act, 2009 (w.e.f. 1 April 2009) for the earlier figure of five thousand rupees. The threshold is computed after reducing the tax by deduction/collection at source as required by section 209(1)(d); it is the net advance tax payable that must reach ten thousand rupees.
Interaction with the interest provisions
Section 208 is the gateway to sections 234B and 234C: those interest provisions presuppose a "liability to pay advance tax" under section 208. If the section 208 threshold is not crossed, the foundation for advance-tax interest disappears. The section is mechanical and is rarely litigated in its own right; the contested questions are normally whether a particular receipt entered the computation (a section 209 question) and whether interest was correctly worked on the returned or the assessed income (a section 234B question).
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
208. Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is ten thousand rupees or more.
C. AUTHORITIES
Section 208 is a mechanical threshold provision and is seldom the subject of direct merits litigation; the candour rule is observed. The authorities below fix the points at which the threshold connects to the computation and to interest. All citations have been web-verified.
Cluster 1 - The threshold and its consequences
No Supreme Court or High Court decision construes the ten-thousand-rupee figure itself; it is applied as written. The cognate authorities below govern the provisions that the threshold feeds into.
CIT v. Ranchi Club Ltd. (2001) 247 ITR 209 (SC)
Principle: Interest under sections 234A/234B is leviable on the tax on the returned income, not on the higher assessed income (affirming the Patna High Court, 217 ITR 72).
Use: Locates the base on which advance-tax liability and the consequent interest are measured once the section 208 threshold is crossed.
DIT v. Mitsubishi Corporation (2021) 438 ITR 174 (SC)
Principle: Whether the section 208 liability is attracted at all depends on the section 209 computation, in which tax deductible/collectible at source is reduced (subject to the Finance Act, 2012 proviso).
Use: Confirms that the threshold is tested on the net advance tax after the section 209(1)(d) reduction (treated under section 209).
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 208 - Conditions of Liability to Pay Advance Tax
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Live. The monetary threshold (Rs. 10,000) that triggers the advance-tax obligation.
Finance Act, 2026: No amendment.
Mechanism: Advance tax is payable only where the advance tax computed under the Chapter is ten thousand rupees or more (threshold substituted by the Finance Act, 2009 for Rs. 5,000).
Litigation profile: Mechanical; rarely litigated on its own text. Disputes arise on the inputs (section 209) and the interest (section 234B/234C), not on the threshold figure.
A. SECTION COMMENTARY
Section 208 fixes the threshold of liability. Advance tax is payable in a financial year only where the amount of such tax payable by the assessee during that year, computed under the Chapter, is ten thousand rupees or more. Below that figure no advance tax is due, and correspondingly no interest under section 234B/234C can be charged for not paying it. The threshold is a single, all-or-nothing trigger: once the computed advance tax reaches ten thousand rupees, the whole of it (in the prescribed instalments) becomes payable, not merely the excess over the threshold.
The figure and its history
The present threshold of ten thousand rupees was substituted by the Finance Act, 2009 (w.e.f. 1 April 2009) for the earlier figure of five thousand rupees. The threshold is computed after reducing the tax by deduction/collection at source as required by section 209(1)(d); it is the net advance tax payable that must reach ten thousand rupees.
Interaction with the interest provisions
Section 208 is the gateway to sections 234B and 234C: those interest provisions presuppose a "liability to pay advance tax" under section 208. If the section 208 threshold is not crossed, the foundation for advance-tax interest disappears. The section is mechanical and is rarely litigated in its own right; the contested questions are normally whether a particular receipt entered the computation (a section 209 question) and whether interest was correctly worked on the returned or the assessed income (a section 234B question).
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
208. Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is ten thousand rupees or more.
C. AUTHORITIES
Section 208 is a mechanical threshold provision and is seldom the subject of direct merits litigation; the candour rule is observed. The authorities below fix the points at which the threshold connects to the computation and to interest. All citations have been web-verified.
Cluster 1 - The threshold and its consequences
No Supreme Court or High Court decision construes the ten-thousand-rupee figure itself; it is applied as written. The cognate authorities below govern the provisions that the threshold feeds into.
CIT v. Ranchi Club Ltd. (2001) 247 ITR 209 (SC)
Principle: Interest under sections 234A/234B is leviable on the tax on the returned income, not on the higher assessed income (affirming the Patna High Court, 217 ITR 72).
Use: Locates the base on which advance-tax liability and the consequent interest are measured once the section 208 threshold is crossed.
DIT v. Mitsubishi Corporation (2021) 438 ITR 174 (SC)
Principle: Whether the section 208 liability is attracted at all depends on the section 209 computation, in which tax deductible/collectible at source is reduced (subject to the Finance Act, 2012 proviso).
Use: Confirms that the threshold is tested on the net advance tax after the section 209(1)(d) reduction (treated under section 209).
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.