Liability for Payment of Advance Tax

Section 403 — - LIABILITY FOR PAYMENT OF ADVANCE TAX

Section 403 of the Income-tax Act, 2025 corresponds to s. 207 (FA 1987) of the Income-tax Act, 1961, restated within the consolidated advance tax framework of Chapter XIX.

STATUTORY ARCHITECTURE

Section 403 establishes the liability principle: tax shall be payable in advance during any FY, in respect of total income of the assessee which would be chargeable to tax for the AY immediately following that FY (referred to as 'current income'). Liability arises only if tax payable on the current income (less TDS / TCS) is INR 10,000 or more.

EXEMPTION FOR SENIOR CITIZENS

A resident senior citizen (60+ years) not having any income chargeable under the head 'Profits and gains of business or profession' is exempted from advance tax (s. 207(2) of 1961 -- preserved in s. 403).

WORKED EXAMPLE

FY 2026-27: Estimated total income INR 18 lakhs; estimated tax INR 3.6 lakhs; expected TDS INR 50,000. Net advance tax obligation = 3.6L - 0.5L = INR 3.1 lakhs > 10,000 -> liable.

PRACTITIONER PLANNING NOTES

• First check threshold: tax liability LESS TDS LESS TCS LESS rebate -- if < INR 10,000, no advance tax required.
• Senior citizen exemption: only for those 60+ AND no PGBP income; rental + interest + dividend OK.
• Non-resident's advance tax obligation: same threshold (INR 10,000) but estimation must factor in DTAA relief.

CROSS-REFERENCES

• s. 403-411 (advance tax framework, this Sub-Chapter).
• s. 425 (interest for deferment of advance tax).
• s. 423 / 424 (interest for default in return / advance tax).