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Do I need to pay the advance tax?

Advance tax is payable if the total tax liability is likely to be Rs 10,000 or more

By OLM Desk

I am about to retire in a couple of months. Do I still need to pay the advance tax? Most of my income post retirement will be in the form of interest from my investments.

Bala Nathan, Bengaluru

Generally, advance tax is payable by an individual as per the prescribed instalments if the total tax liability (after tax deducted at source) on the estimated income is likely to be Rs 10,000 or more during the relevant FY. But resident senior citizens who do not have any income from business or profession are exempted from payment of advance tax, irrespective of tax liability quantum. As you will retire later this year, and assuming you are over 60 years old then, you will qualify as a senior citizen for this financial year for tax purposes. Effectively, you need not pay advance tax instalments. If in the future you earn income from business or profession, you would be required to pay advance tax on that income.

 

olmdesk@outlookindia.com

 

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