Section 408 — Instalments of advance tax and due dates. Successor to s.211 of the 1961 Act.
Section 408 is in Chapter XIX — Collection and Recovery of Tax, which runs from section 390 to section 430.
Sub-section (1) requires all assessees liable to pay advance tax, other than those in sub-section (2), to pay it on the current income calculated in the manner laid down in section 405 in four instalments during each financial year, with the due dates and amounts in the Table: on or before the 15th June, not less than 15% of the advance tax; on or before the 15th September, not less than 45% as reduced by the amount paid in the earlier instalment; on or before the 15th December, not less than 75% as reduced by amounts paid in earlier instalments; and on or before the 15th March, the whole amount as reduced by amounts paid in earlier instalments.
Sub-section (2) provides a single instalment for an assessee who declares profits and gains as per section 58(2) (Table: Sl. No. 1 or 3): the whole amount of advance tax on the current income, calculated in the manner laid down in section 405, on or before the 15th March of each financial year. Sub-section (3) provides that any amount paid by way of advance tax on or before the 31st March is treated as advance tax paid during the financial year ending on that day for all the purposes of the Act.
Tax on the year's income is collected during the year rather than after it, and the instalment ladder spreads that collection so that three quarters of the liability is in before the year's last quarter begins. The percentages are cumulative rather than equal so that a taxpayer whose income arrives late in the year is not required to pay early on income he has not earned. Sub-section (2) recognises that a presumptive assessee's income is a function of the year's turnover and cannot sensibly be estimated in instalments, and sub-section (3) closes the gap between the 15th March instalment and the year end.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| First instalment | Not less than 15% of such advance tax | Payable on or before the 15th June | Sub-section (1), Table Sl. No. 1 |
| Second instalment | Not less than 45% of such advance tax | Payable on or before the 15th September, as reduced by the amount, if any, paid in the earlier instalment | Sub-section (1), Table Sl. No. 2 |
| Third instalment | Not less than 75% of such advance tax | Payable on or before the 15th December, as reduced by the amounts, if any, paid in earlier instalments | Sub-section (1), Table Sl. No. 3 |
| Fourth instalment | The whole amount of such advance tax | Payable on or before the 15th March, as reduced by the amounts, if any, paid in earlier instalments | Sub-section (1), Table Sl. No. 4 |
| Single instalment for a presumptive assessee | The whole amount of advance tax on the current income | Assessee declaring profits and gains as per section 58(2) (Table: Sl. No. 1 or 3); payable on or before the 15th March | Sub-section (2) |
| Outer date for a payment still to count as advance tax | On or before the 31st March | Any amount so paid is treated as advance tax paid during the financial year ending on that day, for all the purposes of the Act | Sub-section (3) |
The percentages are cumulative and are floors, not fixed instalments: each row says "not less than" the stated percentage of the whole advance tax, reduced by what has already been paid, so by 15 September the total paid must reach 45% and by 15 December 75%, whatever the split between instalments. Paying more early is permitted and reduces what is due later. Sub-section (2) is a complete substitute, not a concession added on top: an assessee declaring under section 58(2) (Table: Sl. No. 1 or 3) has no June, September or December obligation at all and pays the whole amount on or before 15 March. Sub-section (3) matters where a payment slips past the last instalment date — it still counts as advance tax of that financial year if made on or before 31 March, for all the purposes of the Act, though it does not undo the fact that the 15 March instalment date was missed.
A company estimates its advance tax for a financial year at forty lakh rupees. It must have paid at least six lakh by 15 June, at least eighteen lakh in aggregate by 15 September, at least thirty lakh in aggregate by 15 December, and the whole forty lakh by 15 March, each instalment being reduced by what was already paid. An individual who declares profits and gains as per section 58(2) (Table: Sl. No. 1) on the same estimated liability pays nothing on the first three dates and the whole forty lakh on or before 15 March. If either pays a further two lakh on 28 March, sub-section (3) treats that as advance tax paid during that financial year.
You meet this every quarter in the advance tax challans you pay and in the advance tax schedule of your return, where each instalment is reported against its due date. It is the provision against which a shortfall is measured when interest for deferment or short payment of advance tax is computed in an intimation or assessment.
Not less than 45% of such advance tax, as reduced by the amount, if any, paid in the earlier instalment.
An assessee, who declares profits and gains as per the provisions of section 58(2) (Table: Sl. No. 1 or 3), shall pay the whole amount of advance tax on the current income, calculated in the manner laid down in section 405 during each financial year, on or before the 15th March.
Any amount paid by way of advance tax on or before the 31st March, shall be treated as advance tax paid during the financial year ending on that day for all the purposes of this Act.
See the full 1961 to 2025 concordance.
See the circulars index.
See the notifications index.