Income-tax Act, 1961 | Chapter XVII-C

Section 207 of the Income-tax Act, 1961: Liability for Payment of Advance Tax

Section 207 established the obligation to pay income tax in advance on estimated current income and provided a specific exemption for qualifying resident senior citizens. This guide explains the provision, related rules, and the transition to the Income-tax Act, 2025.

Important update (October 2026): The Income-tax Act, 2025 applies from 1 April 2026 to tax year 2026-27 onwards. The 1961 Act continues to govern earlier years under transitional provisions. For current-year advance tax, refer to Chapter XIX-C of the 2025 Act, rather than applying Section 207 of the 1961 Act as current law.

What is advance tax?

Advance tax is income tax paid during the relevant year based on an estimate of taxable income, rather than being paid entirely after the year ends. Under the 1961 Act, Section 207 set out the basic liability, while Sections 208 to 219 contained conditions, computation and payment rules. The expression current income referred to the total income estimated to be chargeable to tax for the immediately following assessment year.

Section 207(1): General liability

Section 207(1) required advance payment of tax during a financial year in accordance with Sections 208 to 219 on the assessee's current income. This obligation was read with Section 208, under which advance tax was payable when the amount calculated as payable for that year was Rs. 10,000 or more.

Taxpayers estimated their income from applicable sources, determined their tax liability using the relevant rates, and accounted for eligible tax deducted or collected at source and other applicable reliefs when computing the amount payable.

Section 207(2): Exemption for resident senior citizens

Section 207(2), inserted by the Finance Act, 2012 with effect from 1 April 2012, excluded an individual from the advance-tax requirement where both conditions were satisfied:

The individual was resident in India and attained the age of 60 years or more at any time during the relevant previous year.
The individual had no income chargeable under the head "Profits and gains of business or profession".

For example, a resident individual aged 65 who had only pension and bank-interest income could qualify for this exemption, even if tax remained payable on that income. A non-resident individual, or a resident senior citizen with taxable business or professional income, did not qualify merely by reason of age.

Note: Exemption from advance tax did not mean exemption from income tax or from applicable return-filing obligations.

Related advance-tax provisions under the 1961 Act

Provision	Purpose
Section 208	Rs. 10,000 threshold for advance-tax liability.
Section 209	Method for computing advance tax.
Section 210	Payment by the assessee or pursuant to an Assessing Officer's order.
Section 211	Instalment dates and amounts.
Sections 234B and 234C	Interest provisions for relevant defaults or deferment, where applicable.

Instalment schedule under Section 211

Due date	Cumulative advance tax generally payable
15 June	At least 15%
15 September	At least 45%
15 December	At least 75%
15 March	100%

Eligible presumptive-taxation taxpayers under Sections 44AD and 44ADA generally paid the entire advance-tax amount by 15 March. Tax paid by 31 March could also be treated as advance tax for that financial year, although interest consequences could still arise from missed instalment deadlines.

Advance tax under the Income-tax Act, 2025

The Income-tax Act, 2025 came into force on 1 April 2026. Advance-tax provisions are now organised under Chapter XIX-C. Section 405 provides for computation of advance tax and Section 408 specifies instalments and due dates. The Income Tax Department states that the new Act makes no substantive policy change to the advance-tax framework, while simplifying its presentation.

Accordingly, advance-tax payments relating to tax year 2026-27 fall under the 2025 Act. Matters relating to financial year 2025-26 and earlier years continue to be addressed under the 1961 Act as provided by the transition rules.

Read the official Income-tax Act, 2025 (PDF) and the Income Tax Department's transition FAQs.

Frequently asked questions

Who must pay advance tax under Section 207?

Under the 1961 Act, persons whose estimated advance-tax liability is Rs. 10,000 or more generally pay advance tax, subject to the resident senior citizen exception.

Are resident senior citizens exempt?

A resident individual aged 60 years or more during the previous year is exempt if they have no income chargeable under profits and gains of business or profession.

Does Section 207 apply to tax year 2026-27?

No. The Income-tax Act, 2025 governs tax year 2026-27; Section 207 of the 1961 Act remains relevant for earlier years under transitional rules.

Official legislation and guidance

Editorial update: 27 October 2026. This article provides general legal information; the applicable law depends on the relevant tax year and facts.