When Assessee is Deemed to be in Default

Section 409 — - WHEN ASSESSEE IS DEEMED TO BE IN DEFAULT

Section 409 of the Income-tax Act, 2025 corresponds to s. 218 (FA 1987) of the Income-tax Act, 1961, restated within the consolidated advance tax framework of Chapter XIX.

STATUTORY ARCHITECTURE

Where assessee fails to pay any instalment of advance tax pursuant to AO's order (s. 407), he is deemed to be assessee in default for that instalment. Recovery follows s. 412+ machinery.

PRACTITIONER PLANNING NOTES

• Default in self-assessment instalments (s. 406) does NOT trigger 'assessee in default' status -- only s. 425 interest applies.
• Default in AO-ordered instalments (s. 407) DOES trigger default + recovery.

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).