Chapter XIX - Collection and Recovery of Tax
Section 409
Section 409: when an assessee is deemed to be in default
Section 409 defines when a taxpayer is treated as an "assessee in default" specifically in relation to advance tax paid on an Assessing Officer's order. Being deemed in default triggers the interest, penalty and recovery machinery in the rest of this Chapter.
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Need advice on Section 409?
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
A person shall be deemed to be an assessee in default, if such person— (a) does not pay on the date specified in section 408, any instalment of the advance tax that he is required to pay by an order of the Assessing Officer under section 407(1) and (4); or (b) does not send to the Assessing Officer an intimation under section 407(8) on or before the date on which any such instalment as is not paid becomes due; or (c) does not pay on the basis of his estimate of his current income, the advance tax payable by him under section 407(9), in respect of such instalment or instalments.
Introduction
Section 409 describes when a person is deemed an assessee in default in the advance-tax order process.
It addresses non-payment of an ordered instalment, failure to send a lower-estimate intimation before an unpaid instalment becomes due, and non-payment on a higher estimate under section 407(9).
Key takeaways
Order-based instalment
Missing the section 408 date for an instalment required under a section 407 order is a listed trigger.
Lower-estimate intimation
The intimation under section 407(8) must be sent by the relevant unpaid instalment due date.
Higher estimate
An instalment due on the person’s higher section 407(9) estimate is also covered.
Ordered instalment not paid by its due date
A person is deemed an assessee in default if an instalment required by an Assessing Officer order under section 407(1) or (4) is not paid on the section 408 date. Check the order and the particular instalment before applying this limb.
Lower-estimate intimation missed
A separate default arises if the person does not send the Assessing Officer the section 407(8) intimation on or before the date an unpaid instalment becomes due. A private calculation alone does not satisfy the specified intimation.
Payment on own estimate missed
The third limb addresses failure to pay the advance tax payable on the person’s estimate of current income under section 407(9), for the instalment or instalments concerned. Section 409 identifies the default; any consequence must be checked under the relevant later provision.
Step-by-step flow for applying Section 409
- 1
Is there an Assessing Officer's order under Section 407(1) or (4) requiring advance-tax instalments?
Section 409 deals with advance tax required by such an order.
- 2
Was each instalment paid on the date specified in Section 408?
If an instalment required by the order is not paid on that date, Section 409(a) is engaged.
- 3
If the person relies on a lower estimate, was the Section 407(8) intimation sent on or before the due date of the unpaid instalment?
If not, Section 409(b) is engaged. A private calculation that is not sent to the Assessing Officer does not count.
- 4
Did the person pay advance tax on his own estimate of current income as required by Section 407(9)?
If not, Section 409(c) is engaged for that instalment or those instalments.
- 5
Identify the consequence separately
Section 409 only deems the person an assessee in default. Interest, penalty or recovery are governed by other provisions, which must be read on their own terms.
Practical checklist
Do
- Retain the Assessing Officer order, payment schedule and any estimate intimation.
- Compare dates of intimation and payment with the instalment dates in section 408.
Avoid
- Do not assume a lower private estimate alone replaces the section 407 intimation step.
Illustrative example
Worked example: a missed instalment without an intimation
Hypothetical facts (illustration only, not a real taxpayer): Ms. Gupta receives an order under Section 407(1) requiring advance tax in instalments. She pays the first instalment. She thinks her income has fallen, so she does not pay the next instalment, but she does not send any intimation to the Assessing Officer.
Order exists
There is an order under Section 407(1), so Section 409 is relevant.
Clause (a)
She did not pay an instalment required by the order on the Section 408 date.
Clause (b)
She did not send a Section 407(8) intimation on or before the date that unpaid instalment became due.
Result
She is deemed an assessee in default under Section 409. Her belief that income fell does not help without the intimation.
Outcome
- Ms. Gupta is deemed in default for the unpaid instalment.
- For future instalments she can send the prescribed intimation under Section 407(8) and pay on her own estimate.
Frequently asked questions
What does 'assessee in default' mean under Section 409?
It means the person has missed an advance tax instalment ordered by the Assessing Officer, failed to send the required intimation about a lower estimate, or failed to pay tax on the basis of his own current-income estimate, as described in clauses (a), (b) and (c) of Section 409.
What happens once a person is deemed to be in default under Section 409?
Section 409 itself only defines the default; the consequences - penalty and recovery - follow under the later provisions of this Chapter, such as Sections 411 to 413.
Need help applying this provision to your situation?
Check your advance tax default position with our tax teamLast updated 9 October 2026