Section 207 of ITA, 1961 : Section 207: Liability For Payment Of Advance Tax

Explanation using Example

Imagine Mr. Sharma, a 45-year-old salaried employee working at a software company in India. His income includes his salary and some interest from fixed deposits. According to Section 207 of the Income-tax Act, 1961, Mr. Sharma is required to pay advance tax on his current income (salary and interest income) during the financial year, before the end of the assessment year, as his income is chargeable to tax.

In contrast, Mrs. Iyer, a 65-year-old retired teacher living off her pension and interest from savings, is not required to pay advance tax under the same section. Since she is over sixty years old and does not have any income from a business or profession, she is exempt from the provisions of paying advance tax as per the conditions mentioned in Section 207(2).