Meaning of “Current income”

The meaning of current income under section 207 to 216 of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of current income.

Meaning of current income defined by court

The phrase ‘current income’ used in section 207 to 216 of the Income Tax Act came up before Hon’ble Bombay High Court in CIT vs. Kotak Mahindra Finance ltd. [2003] 130 Taxman 730 (bom.) and it explained.

Section : 207 to 216

Meaning : The words ‘current income’ are very crucial. The words ‘current income’ refer to computation of total income under the provisions of the income-tax act including section 115J. Under section 207, the words ‘total income’ have been equated to the expression ‘current income’.

Section 207 to 216 of Income Tax Act

Liability for payment of advance tax.

207. (1) Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as “current income”.

(2) The provisions of sub-section (1) shall not apply to an individual resident in India, who—

(a) does not have any income chargeable under the head “Profits and gains of business or profession”; and

(b) is of the age of sixty years or more at any time during the previous year.

In this article, you can get guidance from high courts on the meaning of current income under section 207 to 216 of the Income Tax Act.

Updated up to Finance Act 2021