Sections 407 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.
Where an assessee does not pay advance tax on his own accord, the Act lets an Assessing Officer require it by an order. Section 407 sets out that order, how it can be amended and how the assessee can respond. Section 409 says when the assessee is deemed to be in default, and section 410 gives credit for advance tax paid. This article follows the text as per the Income-tax Act, 2025 as amended by the Finance Act, 2026. If you want a second pair of eyes on an order you have received, see our advance tax calculation service.
An Assessing Officer may, by a written order, require a person already assessed by regular assessment to pay advance tax on a specified sum, the higher of the latest assessed income and any later returned income. The order can be passed up to the last day of February (the amended order, before 1 March) and is followed by a notice of demand under section 289. Missing an instalment under the order, not sending the intimation, or not paying on the revised estimate makes the person an assessee in default (section 409). Advance tax paid is credited in the regular assessment (section 410).
Section 407(1) to (3): the order and the specified sum
Under section 407(1), where a person has already been assessed for the total income of any tax year by way of regular assessment and the Assessing Officer is of the opinion that he is liable to pay advance tax, the Assessing Officer may require him to pay advance tax on the "specified sum", calculated in the manner of section 405, by an order in writing. The order specifies the instalment or instalments and they are payable on or before the due date of each instalment in section 408. (The copy prints the last words of sub-section (1), "section 408.", on a line of its own at the end of the sub-section; that line is not the start of section 408.)
Section 407(2): the order may be passed at any time during the financial year but not later than the last day of February of that financial year, and it is followed by a notice of demand under section 289. For the demand itself see our post on section 289.
Section 407(3) defines the specified sum for sub-section (1) as the higher of:
- the total income of the latest tax year in respect of which the assessee has been assessed by way of regular assessment; or
- the total income returned by the assessee in any return of income furnished by him for any subsequent tax year.
Example (amounts assumed). Dhruv Metals was last regularly assessed on a total income of Rs. 18,00,000. It later filed a return for a subsequent tax year showing Rs. 22,00,000. The specified sum is the higher, Rs. 22,00,000. The order will compute advance tax under section 405 on that sum and set the instalments.
Section 407(4) to (6): amending the order
If after the order under sub-section (1):
- (a) a return of income is furnished under section 263 or in response to a notice under section 268; or
- (b) a regular assessment is made for a tax year later than the assessment referred to in sub-section (1),
the Assessing Officer may amend the order and require advance tax on the new specified sum, on or before the due date of each instalment in section 408.
The amended order may be passed at any time before the 1st March of that tax year and is followed by a demand notice under section 289 (sub-section (5)). For this purpose the specified sum is the total income declared in the return, or computed in the regular assessment, as the case may be (sub-section (6)).
Section 407(7): late service of the demand
If the notice of demand under section 289 for an order under sub-section (2) or (5) is served after any of the due dates in section 408, the appropriate part or the whole of the amount specified in the notice is payable on or before each due date falling after the date of service. Earlier due dates that have already gone are therefore not demanded retrospectively as missed instalments.
Section 407(8) and (9): the assessee's own estimate
| Sub-section | Assessee's estimate | What the assessee does |
|---|---|---|
| (8) | Advance tax on current income would be lower than the amount in the order | May send an intimation in the prescribed form to the Assessing Officer, and pay advance tax on the current income, calculated as in section 405, as accords with his estimate, at an appropriate percentage, on or before each instalment due date falling after the date of the intimation |
| (9) | Advance tax on current income would exceed the amount in the order or in the intimation under (8) | Pays advance tax on the current income, calculated as in section 405, at the appropriate part or whole of the higher amount as accords with his estimate, on or before the due date of the last instalment in section 408 |
The prescribed form of intimation is left to the Income-tax Rules, 2026 (see our rule-wise guides). Note the difference in timing: a lower estimate is paid over the instalments that remain after the intimation, while a higher estimate may be paid by the last instalment.
Section 409: when the assessee is in default
A person is deemed to be an assessee in default if he:
| Clause | Default |
|---|---|
| (a) | Does not pay, on the date specified in section 408, any instalment of the advance tax he is required to pay by an order of the Assessing Officer under section 407(1) and (4) |
| (b) | Does not send the intimation under section 407(8) to the Assessing Officer on or before the date on which any instalment not paid becomes due |
| (c) | Does not pay, on the basis of his estimate of current income, the advance tax payable by him under section 407(9) |
in respect of that instalment or those instalments.
Example (amounts assumed). An order requires Dhruv Metals to pay Rs. 3,00,000 in four instalments. It misses the second instalment of Rs. 1,00,000 and sends no intimation by the due date. Under section 409(a) and (b) it is deemed an assessee in default in respect of that instalment. Had it estimated lower income and sent the intimation before the instalment date, clause (b) would not apply, and it would pay on its own estimate under section 407(8).
Consequences of being an assessee in default are in other provisions: the interest provisions of Part E of Chapter XIX (see our post on advance tax interest under section 424) and the penalty and recovery provisions of Part D, which our articles on sections 411 onwards explain. Section 409 itself states only the circumstances.
Section 410: credit for advance tax
Any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax in pursuance of this Part:
- shall be treated as a payment of tax in respect of the income of the tax year in which it was payable; and
- credit for it shall be given to the assessee in the regular assessment.
Three features are worth noting. The credit covers sums paid and sums recovered, so advance tax recovered from the assessee is also credited. Penalty and interest are excluded, so these cannot be set off as advance tax. And the credit is linked to the tax year in which the advance tax was payable, not the date of payment.
Example (amounts assumed). Of Rs. 3,00,000 required, Dhruv Metals pays Rs. 2,00,000 and the balance is recovered from it, with interest of Rs. 5,000. The Rs. 3,00,000 of tax is credited in the regular assessment; the Rs. 5,000 interest is not.
Where these sections sit in Part C
Sections 403 to 406, on liability, threshold, computation and payment on one's own accord, are in our companion article on sections 403 to 406; section 408, on instalments and due dates, has its own post at advance tax instalments. The order mechanism in section 407 is the Assessing Officer's route; the assessee's own route is section 406.
Need help with an advance tax order or estimate?
An order under section 407 can set instalments that do not match your current-year income, and the sub-section (8) intimation is the way to correct it. Our advance tax calculation team prepares the estimate, reviews the order and tracks the due dates.
Key takeaways
- Section 407 applies to a person already assessed by regular assessment; the order must be in writing and may be passed up to the last day of February.
- The specified sum is the higher of the latest regularly assessed income and the income returned for any later tax year.
- An amended order is possible before 1 March of the tax year after a later return or regular assessment.
- A lower estimate is notified by an intimation under sub-section (8); a higher estimate is paid by the last instalment under sub-section (9).
- Missing an ordered instalment, the intimation, or payment on the revised estimate makes the person an assessee in default (section 409).
- Advance tax, other than penalty or interest, is credited in the regular assessment (section 410).
Read next
- Sections 403 to 406: advance tax liability, computation and payment
- Section 411: when tax is payable and when an assessee is deemed in default
- Section 408: advance tax instalments and due dates
- Section 289: notice of demand
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.