Section 405 — Computation of Advance Tax | ITA 2025

Section 405 of the Income-tax Act, 2025 corresponds to s. 209 (FA 1987) of the Income-tax Act, 1961, restated within the consolidated advance tax framework of Chapter XIX. STATUTORY ARCHITECTURE Computation rule: estimated total income…

Section 405 — - COMPUTATION OF ADVANCE TAX

Section 405 of the Income-tax Act, 2025 corresponds to s. 209 (FA 1987) of the Income-tax Act, 1961, restated within the consolidated advance tax framework of Chapter XIX.

Statutory text — Income-tax Act, 2025

(1) The amount of advance tax payable by an assessee under section 404, on his own accord under section 406, or in pursuance of an order of an Assessing Officer under section 407, in the financial year shall, subject to the provisions of sub-section (2), be computed as under— A=B–C where,— A = the amount of advance tax payable in a financial year; B = income-tax on the specified sum calculated at the rates in force in the financial year, where “specified sum” shall have the meaning assigned to it in section 406 or 407; C = amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income subject to the following:—

(a) such income is computed before allowing any deduction admissible under this Act and has been taken into account in computing the specified sum; and

96. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.

(b) (i) the person responsible for deducting tax has paid or credited such income after deduction of tax; or

(ii) the person responsible for collecting tax has received or debited such income after collection of tax.

(2) In the case of any class of assessees, where the Finance Act of the relevant year provides that, net agricultural income shall be taken into account for the purposes of computing advance tax, then,—

(a) for the purposes of order as mentioned in section 407(1) and (4), the net agricultural income shall be the amount that has been taken into account for the purposes of charging income-tax on the specified sum as mentioned in sub-sections (3) and (6) of the said section; or

(b) in any other situation, the net agricultural income as estimated by the assessee for the tax year. Payment of advance tax by assessee on his own accord.

STATUTORY ARCHITECTURE

Computation rule: estimated total income for the year * applicable rates -- LESS TDS / TCS expected to be deducted on income included in such estimate -- = advance tax payable.

AO ESTIMATION (208(4) ANALOG)

AO is empowered to require an assessee to pay advance tax on basis of last assessed income or AO's estimate. Used rarely; typical mechanism is self-assessment by assessee.

WORKED EXAMPLE

Estimated income FY 27 INR 50L. Tax (new regime corp 22%) = INR 11L. Cess 4% = 44,000. Total = INR 11.44L. Less TDS (estimated) INR 1.50L. Advance tax payable = INR 9.94L. Spread across 4 instalments: 15-Jun (15%) = 1.49L; 15-Sep (45% cumulative -- 30% incremental) = 2.98L; 15-Dec (75% cumulative -- 30% incremental) = 2.98L; 15-Mar (100% -- 25% incremental) = 2.49L.

PRACTITIONER PLANNING NOTES

Each instalment must align cumulative deposit % to cumulative liability % -- shortfall triggers s. 425.
Adjust for deferred / accelerated income at each instalment date; better to over-deposit than under-deposit.
PGBP estimate: project monthly profitability; for MSME presumptive, single instalment (15-Mar) under s. 405 r/w s. 211 of 1961.

CROSS-REFERENCES

s. 403-411 (advance tax framework, this Sub-Chapter).
s. 425 (interest for deferment of advance tax).
s. 423 / 424 (interest for default in return / advance tax).

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
2025 provision	1961 counterpart
s. 405 -- Computation of Advance Tax	s. 209 (FA 1987)