Section 208 of the Income-tax Act, 1961: Conditions for Payment of Advance Tax

Section 208 sets out the monetary condition for liability to pay advance income tax in India. It applies where advance tax computed for a financial year is Rs. 10,000 or more. For tax year 2026-27 onwards, the corresponding provision is Section 404 of the Income-tax Act, 2025.

Meaning and scope of Section 208

The statutory rule under Section 208 of the Income-tax Act, 1961 is that advance tax is payable during a financial year when the amount of tax payable by the assessee, computed in accordance with the relevant chapter, is Rs. 10,000 or more.

Advance tax means income tax paid during the year in which income is earned rather than waiting until the return of income is filed. Assessee means a person liable to tax or otherwise covered by the statutory definition. The Rs. 10,000 test concerns estimated tax payable after applicable adjustments, not gross receipts or total income.

Section 404 of the Income-tax Act, 2025

Section 404 provides that advance tax is payable by an assessee during a financial year where tax payable, computed under the relevant Part, is Rs. 10,000 or more. The monetary threshold is therefore unchanged.

For authoritative text, see the official Section 208 text, the official Section 404 text and the Income-tax Act, 2025 portal.

How to determine whether advance tax is payable

1. Estimate taxable income for the relevant financial or tax year, including salary, business income, interest, rent, capital gains and other taxable receipts where applicable.
2. Calculate income tax using the applicable rates, regime, surcharge and cess, after eligible reliefs and rebates.
3. Adjust for tax deductible or collectible at source and other adjustments permitted by the applicable advance-tax computation provisions.
4. If the resulting advance-tax liability is Rs. 10,000 or more, determine the instalments and pay by the prescribed dates unless an exemption applies.

Illustration: If estimated income tax after permissible adjustments is Rs. 13,500, the monetary condition is met. If it is Rs. 8,500, the Section 208 or Section 404 threshold is not met. These are illustrative figures, not tax calculations for a particular taxpayer.

Exemption for resident senior citizens

Under Section 207(2) of the 1961 Act, a resident individual aged 60 years or more at any time during the previous year who has no income chargeable under the head "Profits and gains of business or profession" is not required to pay advance tax. The corresponding exemption under the 2025 Act should be considered with its advance-tax liability provisions.

Age alone is insufficient: residential status and the absence of business or professional income are essential conditions.

Advance tax payment schedule

For taxpayers subject to the regular instalment system, the usual cumulative schedule is:

Eligible presumptive-tax taxpayers may be permitted to pay the entire advance tax by 15 March. Applicable statutory provisions and any special rules should be checked for the relevant year.

Related legal provisions

Under the Income-tax Act, 1961, Section 207 concerns liability for advance tax; Section 208 prescribes the threshold; Section 209 deals with computation; Section 210 concerns payment; and Section 211 sets out instalments and due dates. Sections 234B and 234C deal with interest for specified defaults or deferment of advance tax. Under the 2025 Act, Sections 404 and 405 address the threshold and computation respectively.

Frequently asked questions

Is advance tax payable when estimated liability is exactly Rs. 10,000?

Yes. The statutory condition applies where the computed amount is Rs. 10,000 or more.

Does Section 208 still govern advance tax for 2026-27?

No. The corresponding threshold for tax year 2026-27 is contained in Section 404 of the Income-tax Act, 2025. Earlier-year liabilities and consequential interest may remain governed by the 1961 Act.

Does every senior citizen have to pay advance tax?

No. A qualifying resident senior citizen without business or professional income is exempt under the applicable statutory rule.

Official references

Income Tax Department: Section 208 | Income Tax Department: Section 404 | Tax payment guidance and transition FAQs.

Updated 27 October 2026. This article is general legal information; verify applicable law and notifications for the relevant tax year.