Sections 338-344 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A will may leave a person an annuity, a legacy for life or a legacy payable at a future time. Sections 338 to 344 say when an annuity starts and how it is paid, and what an executor must invest to provide for such legacies. This article explains the seven sections, as per the text of the Act consulted.
An annuity with no time fixed for its commencement commences from the testator's death, and the first payment is made at the expiration of a year next after that event (s.338). Where quarterly or monthly payment is directed, the first payment is due at the end of the first quarter or month, but the executor need not pay it till the end of the year (s.339). A legacy that is not specific and is given for life is invested at the end of the year in securities the High Court authorises or directs (s.341). A general legacy payable at a future time is provided for by investing a sufficient sum (s.342).
Part A: Annuities (Chapter IX)
Section 338: when an annuity commences
Where an annuity is given by a will and no time is fixed for its commencement, it shall commence from the testator's death, and the first payment shall be made at the expiration of a year next after that event. So the annuity runs from the death, but the first payment falls a year after.
Section 339: quarterly or monthly annuities
Where there is a direction that the annuity shall be paid quarterly or monthly, the first payment is due at the end of the first quarter or first month, as the case may be, after the testator's death. It shall, if the executor or administrator thinks fit, be paid when due, but he is not bound to pay it till the end of the year.
Section 340: successive payments and death of the annuitant
- (1) Where there is a direction that the first payment of an annuity shall be made within one month, or any other division of time, from the testator's death, or on a day certain, the successive payments are to be made on the anniversary of the earliest day on which the will authorises the first payment to be made.
- (2) If the annuitant dies in the interval between the times of payment, an apportioned share of the annuity shall be paid to his representative.
An invented example: Mr. Pillai's will gives his sister an annuity of Rs. 12,000 a year, payable monthly, and says nothing else about timing. On sections 338 and 339, the first monthly payment is due at the end of the first month after the death, and the executor need not pay it until the end of the year. If the sister dies between two payment dates, sub-section (2) of s.340 gives her representative an apportioned share. For the interest rules on annuities, see our article on sections 351 to 355.
| Section | Rule |
|---|---|
| 338 | No time fixed: annuity commences from death; first payment at expiration of a year |
| 339 | Quarterly or monthly: first payment due at the end of the first quarter or month; executor not bound to pay till end of the year |
| 340 | Successive payments on the anniversary of the earliest authorised first payment; apportioned share to the representative if the annuitant dies between payments |
If you are an executor setting up payments to an annuitant, or an annuitant waiting for the first payment, a short legal consultation can help you apply these timings.
Part B: Investment of funds to provide for legacies (Chapter X)
Section 341: a non-specific life legacy
Where a legacy, "not being a specific legacy", is given for life, the sum bequeathed shall at the end of the year be invested in such securities as the High Court may by any general rule authorise or direct. The proceeds shall be paid to the legatee as they accrue due. The text consulted names no securities; it leaves them to the High Court's general rule, as prescribed.
Section 342: a general legacy payable at a future time
- (1) The executor or administrator shall invest a sum sufficient to meet it in securities of the kind mentioned in section 341.
- (2) The intermediate interest shall form part of the residue of the testator's estate.
Section 343: an annuity with no fund
Where an annuity is given and no fund is charged with its payment or appropriated by the will to answer it, a Government annuity of the specified amount shall be purchased. If no such annuity can be obtained, a sum sufficient to produce the annuity shall be invested for that purpose in securities of the kind mentioned in section 341.
Section 344: a contingent bequest
Where a bequest is contingent, the executor or administrator is not bound to invest the amount of the legacy. He may transfer the whole residue of the estate to the residuary legatee, if any, on his giving sufficient security for the payment of the legacy, if it shall become due. For the meaning of a contingent bequest in the Act and its effect, see Part VI of the Act; for the parallel rule between living persons, see our post on section 21 of the Transfer of Property Act, 1882.
How the sections work together
| Kind of provision in the will | What the executor does | Section |
|---|---|---|
| Annuity, no start time | Annuity runs from death; first payment after a year | 338 |
| Annuity payable quarterly or monthly | First payment at end of first quarter/month, but need not pay before year-end | 339 |
| Life legacy, not specific | Invest the sum at end of year; pay proceeds as they accrue | 341 |
| General legacy payable later | Invest a sufficient sum; intermediate interest goes to residue | 342 |
| Annuity with no fund | Buy a Government annuity, or invest to produce it | 343 |
| Contingent bequest | Not bound to invest; may transfer residue against sufficient security | 344 |
For trustees' own duties on investment under a separate Act, see our post on sections 40 to 42 of the Indian Trusts Act, 1882. It is a different statute, named only for comparison.
Practical points
- Count the year from the death. The text speaks of "a year next after" the testator's death.
- Ask which securities. The Act leaves them to the High Court's general rule, and the text consulted prints none.
- Contingent bequests. The executor may transfer the residue, but only against sufficient security.
- Old terms. "Government annuity" is a term of the text and should be read as printed; its modern equivalents are not addressed in the text consulted.
Later amendments are not shown in the text consulted and should be checked. The rules for the investment of residue bequeathed for life are in the next group of sections, explained in our article on sections 345 to 348.
Need help with annuities or investment of a legacy?
If you are an executor planning payments or investments under a will, or a legatee trying to understand when and how you will be paid, we can explain the Act's rules and help you prepare. Start with our legal consultation service.
Key takeaways
- An annuity with no time fixed commences from the death, with the first payment after a year (s.338).
- Quarterly or monthly annuities fall due at the end of the first quarter or month, but need not be paid till the end of the year (s.339).
- A non-specific life legacy is invested at the end of the year in securities the High Court authorises or directs (s.341); a future general legacy is provided for by investing (s.342).
- Where no fund is appropriated to an annuity, a Government annuity is bought or a sum invested (s.343).
- For a contingent bequest the executor may transfer the residue against sufficient security (s.344).
Read next
- Sections 334-337: conditional assent, assent to own legacy and when legacies must be delivered
- Sections 345-348: residue bequeathed for life, conversion and legacy to a minor
- Sections 351-355: interest on legacies and annuities
- Executor duties under a will: probate, inventory and distribution
Disclaimer: Based on an unofficial print of the Indian Succession Act, 1925 showing amendments up to the Indian Succession (Amendment) Act, 2002 (26 of 2002), as consulted on 2 October 2026. It explains the words of the statute only; later amendments, State amendments and rules, court fees and the way courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.