Chapter XIX - Collection and Recovery of Tax
Section 407
Section 407: advance tax in pursuance of an Assessing Officer's order
Section 407 is the department-driven route for advance tax - where a person has already been assessed by regular assessment and the Assessing Officer believes they are liable for advance tax, the officer can order payment based on the higher of past assessed or returned income, subject to the assessee's own right to revise the estimate.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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, 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.
(2) The order referred to in sub-section (1) 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.
(3) In sub-section (1), “specified sum” means a sum, being higher of,–– (a) the total income of the latest tax year in respect of which the assessee has been assessed by way of regular assessment; or (b) total income returned by the assessee in any return of income furnished by him for any subsequent tax year.
(4) If after making of an order by the Assessing Officer under sub-section (1),— (a) a return of income is furnished by the assessee, under section 263 or in response to a notice under section 268; or (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), the Assessing Officer may amend the order referred to in sub-section (1), and may require such assessee to pay advance tax on the specified sum, calculated in the manner laid down in section 405, on or before the due date of each instalment specified in section 408.
(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.
(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.
(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.
(8) Where a person, who is served with an order referred to in sub-section (1) or (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 405 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.
(9) Where a person, who is served with an order referred to in sub-section (1) or (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.
Introduction
Section 407 allows an Assessing Officer to order advance-tax instalments for a previously assessed person. It also gives the assessee prescribed routes to intimate a lower current-income estimate or pay on a higher one.
Key takeaways
Written order
The initial order states instalments and is followed by a section 289 demand notice.
Order cutoff
The initial order may be passed during the financial year but not later than its last day of February.
Later change
A later return or assessment may support an amended order before 1 March.
Current-income estimate
Subsections (8) and (9) address lower and higher estimates with different steps.
When the Assessing Officer can order advance tax
Where a person has already been assessed for the total income of any tax year by regular assessment, and the Assessing Officer is of the opinion that the person is liable to pay advance tax, the officer may require payment of advance tax on the "specified sum" (computed under Section 405), by a written order specifying the instalment(s) and their due dates under Section 408.
This 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 must be followed by a notice of demand under Section 289.
Meaning of "specified sum" for the order
"Specified sum" here means the higher of: the total income of the latest tax year for which the assessee has been assessed by regular assessment; or the total income returned by the assessee in any return furnished for a subsequent tax year.
Amending the order after a later return or assessment
If, after the order, the assessee furnishes a return of income (under Section 263 or in response to a notice under Section 268), or a later regular assessment is made for a subsequent tax year, the Assessing Officer may amend the order and require advance tax on a revised specified sum - the total income declared in that later return or computed in that later regular assessment - by an amended order passed before 1 March of that tax year, again followed by a demand notice under Section 289.
Effect of late service of the demand notice
If the demand notice under Section 289 is served after any of the instalment due dates in Section 408, the amount specified becomes payable on or before each due date falling after the date of service.
Assessee's right to revise the officer's estimate
If the assessee estimates the advance tax payable on current income to be lower than the amount in the officer's order, they may send an intimation in the prescribed form to the Assessing Officer and pay advance tax on their own lower estimate, at the appropriate percentage, on or before the due dates falling after the intimation.
If the assessee instead estimates that advance tax payable would exceed the amount in the order (or their earlier intimation), they must pay the higher amount that accords with their estimate, on or before the due date of the last instalment under Section 408.
Step-by-step flow for an Assessing Officer's advance-tax order under Section 407
- 1
Has the person already been assessed by regular assessment for any tax year?
Section 407(1) applies only to such a person, and only where the Assessing Officer is of the opinion that the person is liable to pay advance tax.
- 2
Work out the specified sum
Under Section 407(3), it is the higher of the total income of the latest tax year assessed by regular assessment, and the total income returned for any subsequent tax year. Advance tax on it is calculated as laid down in Section 405.
- 3
Check the order and the demand notice
The written order specifies the instalments due on the Section 408 dates. It may be passed during the financial year but not later than the last day of February, and must be followed by a notice of demand under Section 289 (Section 407(2)). If the notice is served after a due date, the amount is payable on the due dates falling after service (Section 407(7)).
- 4
Has a later return been furnished or a later regular assessment made?
Under Section 407(4) to (6), the Assessing Officer may amend the order based on the income in that return or assessment, by an order passed before 1 March of that tax year and followed by a notice under Section 289.
- 5
Does the assessee's own estimate of current income differ from the order?
If lower, the assessee may send an intimation in the prescribed form and pay on that estimate, at the appropriate percentage, on the due dates after the intimation (Section 407(8)). If higher, the assessee must pay the higher amount by the due date of the last instalment under Section 408 (Section 407(9)).
Practical checklist
Do
- Keep the original and amended orders, service dates and demand notices.
- If estimating less than the order, send the prescribed intimation before the relevant remaining instalment.
Avoid
- Do not treat an uncommunicated private estimate as replacing the Assessing Officer’s order.
Illustrative example
Worked example: an order based on returned income
Hypothetical facts (illustration only, not a real taxpayer): Mr. Mehta's latest regular assessment fixed his total income at ₹18,00,000 (assumed). His return for a later tax year shows ₹22,00,000 (assumed). On 20 November of the current financial year, the Assessing Officer orders him to pay advance tax and a notice of demand under Section 289 follows.
Specified sum
The higher of ₹18,00,000 and ₹22,00,000 is ₹22,00,000. Advance tax is calculated on that sum as laid down in Section 405.
Timing of the order
20 November is within the financial year and before the end of February, so the order is within Section 407(2).
Late service
If the notice is served after one or more Section 408 due dates have passed, the amount specified is payable on or before each due date falling after the date of service (Section 407(7)).
Lower estimate
Mr. Mehta expects current income of only ₹15,00,000 (assumed). He may send the prescribed intimation and pay on his own estimate on the remaining due dates (Section 407(8)).
Outcome
- Mr. Mehta should keep the order, the demand notice, its date of service and his intimation.
- If his estimate later rises above the ordered amount, he must pay the higher amount by the last instalment date (Section 407(9)).
Glossary
- Specified sum
- The income amount identified by section 407 for computing an Assessing Officer-ordered advance tax payment.
- Lower-estimate intimation
- The prescribed communication under section 407(8) when the person estimates a lower advance-tax liability than the order.
Frequently asked questions
By when must an Assessing Officer pass the initial order requiring advance tax?
At any time during the financial year, but not later than the last day of February of that financial year, under Section 407(2).
Can an assessee pay less advance tax than an Assessing Officer's order demands?
Yes - Section 407(8) lets the assessee send an intimation estimating a lower liability and pay accordingly, on or before the due dates falling after the intimation.
What happens if the assessee's own estimate is higher than the officer's order?
Under Section 407(9), the assessee must pay advance tax on the higher, self-estimated amount, on or before the due date of the last instalment specified in Section 408.
Need help applying this provision to your situation?
Get help responding to an advance tax orderLast updated 10 October 2026