Section 407 — Payment of advance tax by assessee in pursuance of order of Assessing Officer. Successor to s.209, s.210, s.211 of the 1961 Act.
Section 407 is in Chapter XIX — Collection and Recovery of Tax, which runs from section 390 to section 430.
Sub-section (1) lets the Assessing Officer, where a person has already been assessed for the total income of any tax year by regular assessment and the Officer is of the opinion that he is liable to pay advance tax, require him by an order in writing to pay advance tax on the specified sum, calculated in the manner laid down in section 405, in the instalments specified, on or before each due date in section 408. Sub-section (2) permits that order at any time during the financial year but not later than the last day of February, followed by a notice of demand under section 289. Sub-section (3) defines the specified sum as the higher of the total income of the latest tax year assessed by regular assessment, or the total income returned in any return for a subsequent tax year.
Sub-section (4) allows the order to be amended where a return is afterwards furnished under section 263 or in response to a notice under section 268, or a regular assessment is made for a later tax year; sub-section (5) permits that amended order at any time before the 1st March of that tax year, again followed by a demand notice under section 289; and sub-section (6) defines its specified sum as the total income declared in that return or computed in that regular assessment. Sub-section (7) provides that where the demand notice is served after any of the section 408 due dates, the appropriate part or whole of the advance tax specified in it is payable on or before each due date falling after service.
Sub-section (8) allows a person served with such an order who estimates his advance tax on current income to be lower than the amount specified to send an intimation in the prescribed form and pay according to his estimate, calculated under section 405, on or before each section 408 due date falling after the intimation. Sub-section (9) provides that where he estimates it to exceed the amount specified in the order or intimated under sub-section (8), he shall pay the appropriate part or whole of that higher amount as accords with his estimate, on or before the due date of the last instalment specified in section 408.
Advance tax is otherwise self-computed, and an assessee who stops paying leaves nothing to collect until the year is over. This section lets the Assessing Officer start the obligation for someone already on record, using a figure the assessee has himself been assessed on or returned. Sub-sections (8) and (9) keep the order from becoming a liability disconnected from the year's actual income.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Last date for the order under sub-section (1) | Not later than the last day of February of that financial year | The order may be passed at any time during the financial year up to that date, and must be followed by a notice of demand under section 289 | Sub-section (2) |
| Last date for an amended order under sub-section (4) | At any time before the 1st March of that tax year | Where a return has since been furnished under section 263 or in response to a notice under section 268, or a later regular assessment made; also followed by a demand notice under section 289 | Sub-section (5) |
| Specified sum for the original order | The higher of the total income of the latest tax year assessed by regular assessment, or the total income returned for any subsequent tax year | Advance tax is then calculated on that sum in the manner laid down in section 405 | Sub-section (3)(a) and (b) |
| Specified sum for an amended order | The total income declared in the return, or computed in the regular assessment, mentioned in sub-section (4)(a) and (b) respectively | Replaces the sub-section (3) figure once the order is amended | Sub-section (6) |
| Payment dates where the demand notice is served late | On or before each of the section 408 due dates falling after the date of service | Applies where the notice under section 289 is served after any of those due dates | Sub-section (7) |
The specified sum is not the Officer's estimate of your current income — sub-section (3) confines it to the higher of the latest regularly assessed total income and the total income returned for a subsequent year. Once an order is amended, sub-section (6) replaces that basis entirely with the income declared in the return or computed in the later regular assessment; it is not the higher of the two. Sub-sections (8) and (9) are not symmetrical: a lower estimate is permissive and procedural — the assessee "may" send an intimation in the prescribed form, and pays on that basis only for instalments falling after it — while a higher estimate is mandatory, needs no intimation, and is due on or before the last instalment date in section 408. Sub-section (7) protects an assessee served late.
In January an Assessing Officer forms the opinion that an assessee is liable to pay advance tax. The latest regular assessment shows total income of Rs. 40 lakh and a return for a later year shows Rs. 55 lakh, so the specified sum is Rs. 55 lakh and advance tax is calculated on it under section 405. The order is made before the last day of February and followed by a demand notice under section 289. If the assessee estimates a lower figure he may send an intimation in the prescribed form and pay accordingly for the instalments after it; if he estimates a higher one, sub-section (9) requires payment of the higher amount by the last instalment date, with no intimation needed.
You meet this section as a written order from the Assessing Officer requiring advance tax in specified instalments, followed by a notice of demand under section 289 — that pairing is what identifies it. You answer it, if your own estimate is lower, by the intimation in the prescribed form under sub-section (8).
may be passed at any time during the financial year but not later than the last day of February of such financial year and it shall be followed by issuance of notice of demand under section 289
he shall pay such advance tax on the current income, calculated in the manner laid down in section 405 at the appropriate part or whole of such higher amount of advance tax as accords with his estimate, on or before the due date of the last instalment specified in section 408
See the full 1961 to 2025 concordance.
All of them are in the Rules 2026 index.
See the circulars index.
See the notifications index.
