Section 409 Income Tax Act 2025: When Is an Assessee in Default for Advance Tax?
Section 409 explains when a taxpayer is treated as an assessee in default for failing to comply with an advance-tax order, the associated intimation requirement, or a revised estimate of current income.
What does Section 409 provide?
Section 409 sets out three circumstances in which a person is deemed to be an assessee in default in respect of the relevant advance-tax instalment or instalments. The provision addresses non-payment of an instalment ordered by the Assessing Officer, failure to send the required intimation about a lower estimate, and failure to pay advance tax based on the taxpayer's own revised estimate.
Its wording is important: the default is linked to the particular instalment or instalments concerned, rather than automatically describing every tax obligation of the taxpayer.
When is a taxpayer deemed to be in default?
1. Non-payment under an Assessing Officer's order: Section 409(a)
A person is in default if an instalment required by an order of the Assessing Officer under Section 407(1) or 407(4) is not paid on the applicable date specified in Section 408. This includes an order to pay advance tax or an amended order within the statutory framework.
2. Failure to send an intimation: Section 409(b)
Section 409 also refers to failure to send an intimation to the Assessing Officer under Section 407(8) by the date on which an unpaid instalment becomes due. The provision should be read together with Section 407 to determine the conditions and content of that intimation; merely deciding privately that income will be lower is not the same as complying with the statutory process.
3. Failure to pay on the basis of the taxpayer's estimate: Section 409(c)
Where Section 407(9) requires payment on the basis of the taxpayer's estimate of current income, failure to pay the advance tax so determined may also result in default for the relevant instalment or instalments.
Relevant statutory expressions
A statutory status arising when a person fails to perform an obligation specified in the Act. For Section 409, the status is expressly linked to the instalment or instalments described in that section.
The income-tax authority exercising assessment-related powers under the Act, including the power to make or amend an advance-tax order under Section 407.
The income estimated for the relevant tax year for advance-tax purposes, subject to the applicable computation rules under Sections 405 to 407.
A scheduled portion of advance tax payable by the applicable due date under Section 408.
Practical illustrations
Example 1: Instalment ordered but not paid
An Assessing Officer issues a valid advance-tax order under Section 407. The taxpayer does not pay the instalment by its Section 408 due date. Section 409(a) may deem the taxpayer in default for that instalment.
Example 2: Lower income expected, but no timely intimation
A taxpayer expects income to fall below the amount used in an advance-tax order. If the taxpayer withholds payment but fails to send the required Section 407(8) intimation by the instalment due date, Section 409(b) becomes relevant.
Example 3: Higher income estimated
A taxpayer's revised estimate of current income creates an obligation to pay a higher amount under Section 407(9). If the corresponding advance-tax instalment is not paid, Section 409(c) may apply.
What should a taxpayer do to avoid default?
- Read any order or amended order issued under Section 407 carefully and verify its instalment amounts.
- Check the payment dates and cumulative instalment requirements under Section 408.
- Where a lower estimate is relied on, follow the intimation procedure under Section 407(8) before the relevant due date.
- Where estimated income rises, determine whether Section 407(9) requires additional advance-tax payments.
- Keep copies of orders, intimations, challans and payment acknowledgements.
Consequences such as interest or recovery must be assessed under the separate applicable provisions and the taxpayer's facts; Section 409 itself defines the circumstances of deemed default and does not specify a standalone fixed penalty.
How does Section 409 relate to the 1961 Act?
Section 409 broadly corresponds to Section 218 of the Income-tax Act, 1961. The Select Committee's legislative comparison described the 2025 provision as a textual simplification without an intended policy change. Earlier law may remain relevant for periods governed by the 1961 Act.
Frequently asked questions
Does every late advance-tax payment automatically trigger Section 409?
No. Section 409 refers to specific obligations under Section 407 and dates under Section 408. Other late payments may attract separate provisions.
Can a taxpayer rely on reduced expected income?
Section 407 provides a mechanism involving intimation of a lower estimate. The statutory requirements and timing must be followed; Section 409(b) expressly addresses failure to send the relevant intimation.
Which instalments are covered?
The instalment or instalments affected by the specified non-payment or failure, rather than necessarily every instalment for the tax year.
What is the corresponding provision in the old Income-tax Act?
Section 218 of the Income-tax Act, 1961.
Official legal references
The primary reference is the official Income-tax Act, 2025, as amended by the Finance Act, 2026. The linked materials are provided as research sources, not as navigation menu items.
Last reviewed: 12 November 2026. This article is general legal information, not advice on a particular tax notice or assessment.