diff --git a/CHANGELOG.md b/CHANGELOG.md
index 12421d41145..05d13ed4826 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -49,6 +49,7 @@
 
 ### Bug fixes and improvements
 
+- server: fix dropping column from a table that has update permissions (fix #8415)
 - console: Hide TimescaleDB internal schema from data tab
 - console: support naming convention in source customization for postgres DB [CON-297]
 
diff --git a/server/src-lib/Hasura/RQL/DDL/Permission.hs b/server/src-lib/Hasura/RQL/DDL/Permission.hs
index e937b5ec314..7911e9b9055 100644
--- a/server/src-lib/Hasura/RQL/DDL/Permission.hs
+++ b/server/src-lib/Hasura/RQL/DDL/Permission.hs
@@ -489,7 +489,7 @@ buildUpdPermInfo source tn fieldInfoMap (UpdPerm colSpec set fltr check backendO
                 <<> " is not updatable and so cannot have update permissions defined"
             )
 
-  let updColDeps = map (mkColDep @b DRUntyped source tn) allUpdCols
+  let updColDeps = map (mkColDep @b DRUntyped source tn) updCols
       deps = mkParentDep @b source tn : beDeps ++ maybe [] snd checkExpr ++ updColDeps ++ setColDeps
       depHeaders = getDependentHeaders fltr
       reqHeaders = depHeaders `HS.union` (HS.fromList setHeaders)
diff --git a/server/tests-hspec/Test/RunSQLSpec.hs b/server/tests-hspec/Test/RunSQLSpec.hs
index 04347ec064f..adf69137f95 100644
--- a/server/tests-hspec/Test/RunSQLSpec.hs
+++ b/server/tests-hspec/Test/RunSQLSpec.hs
@@ -4,9 +4,13 @@
 module Test.RunSQLSpec (spec) where
 
 import Harness.Backend.BigQuery qualified as BigQuery
+import Harness.Backend.Postgres qualified as Postgres
+import Harness.Constants qualified as Constants
 import Harness.GraphqlEngine qualified as GraphqlEngine
 import Harness.Quoter.Yaml
 import Harness.Test.Context qualified as Context
+import Harness.Test.Permissions qualified as Permissions
+import Harness.Test.Schema
 import Harness.TestEnvironment (TestEnvironment)
 import Test.Hspec
 import Prelude
@@ -14,7 +18,8 @@ import Prelude
 --------------------------------------------------------------------------------
 -- Preamble
 spec :: SpecWith TestEnvironment
-spec =
+spec = do
+  -- BigQuery
   Context.run
     [ Context.Context
         { name = Context.Backend Context.BigQuery,
@@ -24,13 +29,61 @@ spec =
           customOptions = Nothing
         }
     ]
-    tests
+    bigqueryTests
+  -- Postgres
+  Context.run
+    [ Context.Context
+        { name = Context.Backend Context.Postgres,
+          mkLocalTestEnvironment = Context.noLocalTestEnvironment,
+          setup = postgresSetup,
+          teardown = postgresTeardown,
+          customOptions = Nothing
+        }
+    ]
+    postgresTests
+
+--------------------------------------------------------------------------------
+-- Setup & Teardown
+
+postgresSetup :: (TestEnvironment, ()) -> IO ()
+postgresSetup (env, ()) = do
+  Postgres.setup [testTable] (env, ())
+  Postgres.setupPermissions [updatePermission] env
+
+postgresTeardown :: (TestEnvironment, ()) -> IO ()
+postgresTeardown (env, ()) = do
+  Postgres.teardownPermissions [updatePermission] env
+  Postgres.teardown [testTable] (env, ())
+
+updatePermission :: Permissions.Permission
+updatePermission =
+  Permissions.UpdatePermission
+    { Permissions.permissionTable = "test",
+      Permissions.permissionSource = "postgres",
+      Permissions.permissionRole = "user",
+      Permissions.permissionColumns = ["age"]
+    }
+
+testTable :: Table
+testTable =
+  (table "test")
+    { tableColumns =
+        [ column "id" TInt,
+          column "name" TStr,
+          column "age" TInt
+        ],
+      tablePrimaryKey = ["id"],
+      tableData =
+        [ [VInt 1, VStr "Author 1", VInt 25],
+          [VInt 2, VStr "Author 2", VInt 30]
+        ]
+    }
 
 --------------------------------------------------------------------------------
 -- Tests
 
-tests :: Context.Options -> SpecWith TestEnvironment
-tests opts = do
+bigqueryTests :: Context.Options -> SpecWith TestEnvironment
+bigqueryTests opts = do
   it "BigQuery - running invalid SQL" \testEnvironment ->
     shouldReturnYaml
       opts
@@ -61,3 +114,46 @@ path: "$"
 error: Bigquery HTTP request failed with status code 400 and status message "Bad Request"
 code: bigquery-error
 |]
+
+postgresTests :: Context.Options -> SpecWith TestEnvironment
+postgresTests opts = do
+  -- Testing regression reported at https://github.com/hasura/graphql-engine/issues/8415
+  it "Drop column which is not referred in update permission" \testEnvironment -> do
+    let runSQL = "alter table " <> Constants.postgresDb <> ".test drop column name;"
+    shouldReturnYaml
+      opts
+      ( GraphqlEngine.postV2Query
+          200
+          testEnvironment
+          [yaml|
+type: run_sql
+args:
+  source: postgres
+  sql: *runSQL
+|]
+      )
+      [yaml|
+result: null
+result_type: CommandOk
+|]
+
+  it "Drop column which is referred in update permission" \testEnvironment -> do
+    let runSQL = "alter table " <> Constants.postgresDb <> ".test drop column age;"
+    shouldReturnYaml
+      opts
+      ( GraphqlEngine.postV2Query
+          400
+          testEnvironment
+          [yaml|
+type: run_sql
+args:
+  source: postgres
+  sql: *runSQL
+|]
+      )
+      [yaml|
+code: dependency-error
+error: 'cannot drop due to the following dependent objects : permission hasura.test.user.update
+  in source "postgres"'
+path: "$"
+|]