Payment of advance tax by assessee in pursuance of order of Assessing Officer
[Section-407 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 407(1) of Income Tax Act 2025
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 such person is liable to pay advance tax, he may require such person to pay advance tax on the specified sum, calculated in the manner laid down in section 405, by an order in writing, and specifying the instalment or instalments in which such tax is to be paid, on or before the due date of each instalment specified in section 408.
Section 407(2) of Income Tax Act 2025
407(2) The order referred to in sub-section (1) may be passed at any time during the tax year but not later than the last day of February of such tax year and it shall be followed by a notice of demand under section 289.
Section 407(3) of Income Tax Act 2025
407(3) In sub-section (1), “specified sum” means a sum, being higher of,––
- 407(3)(a) the total income of the latest tax year in respect of which the assessee has been assessed by way of regular assessment; or
- 407(3)(b) total income returned by the assessee in any return of income furnished by him for any subsequent tax year.
Section 407(4) of Income Tax Act 2025
407(4) The Assessing Officer may amend the order referred to in sub-section (1), and may require such person to pay advance tax on the specified sum, calculated in the manner laid down in section 405, if after passing an order under sub-section (1),—
- 407(4)(a) a return of income is furnished by the assessee, under section 263 or in response to a notice under section 268; or
- 407(4)(b) a regular assessment of the income is made in respect of a tax year later than the assessment referred to in sub-section (1), on or before the due date of each instalment specified in section 408.
Section 407(5) of Income Tax Act 2025
407(5) The order referred to in sub-section (4) may be passed at any time before the 1st March of that tax year and it shall be followed by issuance of a demand notice under section 289.
Section 407(6) of Income Tax Act 2025
407(6) In sub-section (4), “specified sum” means the total income declared in the return of income or computed in regular assessment mentioned in sub-section (4) (a) and (b), respectively.
Section 407(7) of Income Tax Act 2025
407(7) If the notice of demand issued under section 289, as referred in sub-sections (2) and (5), is served after any of the due dates specified in section 408, the appropriate part or, the whole of the amount of the advance tax specified in such notice, shall be payable on or before each of the due date falling after the date of service of the notice of demand.
Section 407(8) of Income Tax Act 2025
407(8) Where a person, who is served with an order referred to in sub-sections (1) and (4), estimates the advance tax payable on his current income to be lower than the amount of advance tax specified in the said order, then, he may send an intimation in the prescribed form to the Assessing Officer to that effect, and pay such advance tax on the current income, calculated in the manner laid down in section 401 as accords with his estimate, at an appropriate percentage thereof on or before the due date of each instalment specified in section 408 falling after the date of such intimation.
Section 407(9) of Income Tax Act 2025
407(9) Where a person, who is served with an order referred in sub-sections (1) and (4), estimates that advance tax payable on his current income would exceed the amount of advance tax specified in such order or intimated by him under sub-section (8), 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.
FAQs on Section 407 of Income Tax Act 2025
What is the purpose of Section 407 under the Income Tax Act, 2025?
Section 407 enables the Assessing Officer to require a person, already assessed for any tax year, to pay advance tax on a specified sum by issuing an order in writing.
When can the Assessing Officer issue an order for advance tax under Section 407(1)?
The order can be issued any time during the tax year, but not later than the last day of February of that year.
What is meant by the “specified sum” under Section 407(3)?
The “specified sum” refers to the higher of the total income assessed in the latest regular assessment or the income returned in any subsequent return filed by the assessee.
How is the advance tax to be paid once the order is issued?
The tax must be paid in the instalments and on the due dates as specified in Section 408.
What follows the issuance of an order under Section 407(1)?
A notice of demand under Section 289 is issued after the order.
Can the Assessing Officer amend the advance tax order?
Yes, under Section 407(4), the Assessing Officer may amend the order if a return is filed or a regular assessment is made for a later tax year.
What is the time limit for passing an amended order under Section 407(4)?
The amended order must be passed before 1st March of the tax year.
What is the “specified sum” in case of an amended order?
It is the income declared in the return or computed in the subsequent assessment, as per Section 407(6).
What happens if the notice of demand is served after the due dates for instalments?
As per Section 407(7), the advance tax becomes payable on or before the remaining due dates falling after the notice is served.
Can an assessee estimate a lower amount of advance tax than that specified in the order?
Yes, under Section 407(8), the assessee may send an intimation to the Assessing Officer and pay tax on the estimated current income.
How should such estimated advance tax be calculated and paid?
It must be calculated per Section 401 and paid on or before each remaining due date under Section 408.
What if the assessee estimates a higher amount of advance tax later?
As per Section 407(9), the assessee must pay the higher estimated amount on or before the due date of the last instalment.
Does the assessee have the flexibility to revise their advance tax estimation?
Yes, the assessee may revise their estimation either upward or downward and act accordingly by informing the Assessing Officer or by paying the additional amount directly.
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