Section 408 of the Income-tax Act, 2025 — Instalments of Advance Tax and Due Dates

In plain language

What Section 408 says in plain English

Section 408 of the Income-tax Act, 2025 lays down how and when you must pay advance tax. Advance tax works on a "pay-as-you-earn" basis — instead of paying your whole tax bill in one shot after the year ends, you pay it in four instalments spread across the financial year. This section fixes those four due dates and the minimum percentage payable by each date. It is the direct successor to Section 211 of the old Income-tax Act, 1961, and the schedule is substantially unchanged.

Who must follow Section 408

• Every assessee liable to advance tax — i.e. anyone whose estimated tax liability for the year (after reducing TDS/TCS and reliefs) is ₹10,000 or more under Section 404.
• Salaried employees whose tax is fully covered by TDS usually have nothing to pay here — but if you have other income (rent, interest, capital gains, freelance/business income) on which no tax is deducted, advance tax on that income falls under Section 408.
• Resident senior citizens (60+) with no business or professional income are exempt from advance tax under Section 404, so the Section 408 schedule does not apply to them.

The four instalments (regular taxpayers) — Section 408(1)

• By 15 June — at least 15% of the estimated advance tax.
• By 15 September — at least 45% cumulative (i.e. a further 30%).
• By 15 December — at least 75% cumulative (a further 30%).
• By 15 March — the whole 100% (the final 25%).

Each instalment percentage is cumulative and is reduced by whatever you have already paid earlier in the year.

Presumptive taxpayers pay in one shot — Section 408(2)

If you declare income under the presumptive taxation scheme (Section 58(2), the successor to old Sections 44AD/44ADA for small businesses and professionals), you get a big simplification: you pay the entire 100% of advance tax in a single instalment by 15 March. You are not required to pay anything by June, September or December.

Payments up to 31 March count — Section 408(3)

Section 408(3) confirms that any amount paid as advance tax on or before 31 March is treated as advance tax for the financial year ending that day, for all purposes of the Act. So a payment made between 16 and 31 March is still "advance tax" (though it may attract short interest for lateness).

How it interacts with related sections

• Section 404 sets the ₹10,000 liability threshold that triggers the whole advance tax machinery.
• Section 405 tells you how to compute current income and the tax on it.
• Section 407 lets the Assessing Officer order advance tax where a taxpayer has not paid.
• Section 424 charges interest (1% per month) if you pay less than 90% of assessed tax.
• Section 425 charges interest (1% per month) for deferment — i.e. missing individual instalment targets.

Practical implications and built-in tolerances

• There is a built-in tolerance for the first two instalments: no deferment interest under Section 425 arises if you pay at least 12% by 15 June or at least 36% by 15 September (even if you fall short of the 15% and 45% targets). The 75% and 100% targets have no such cushion.
• Capital gains, casual income (lottery/betting winnings) and dividends are often impossible to predict in advance. For these, the law gives relief: pay the tax on such income in the instalment falling due after the income arises, or by 31 March if it arises very late in the year, and no deferment interest applies.
• Pay online through the e-filing/TIN portal (Challan ITNS 280) and always keep the challan (BSR code, challan serial number, date) to claim credit in your return.