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Direct and Indirect Taxation · Advance Tax

Payment of Advance Tax on Own Accord (Section 406)

Updated 10 October 2026 · Fact-checked

Under Section 406 you estimate your own advance tax and pay it on the due dates without waiting for a notice from the Assessing Officer. If your estimate changes, you pay the revised amount in the next instalment. Tax on capital gains or casual income is paid in the instalments remaining after the income arises.

Understand Payment of Advance Tax on Own Accord (Section 406)

Advance tax means paying income-tax during the tax year in which the income is earned, instead of paying it all after the year ends. Section 406 deals with the most common route: you pay on your own accord. You do not wait for the Assessing Officer to serve a notice or issue an order.

Here is how it works. You estimate your total income for the tax year 2026-27. You compute the tax on it and deduct TDS and TCS that will be credited to you. The balance is your advance tax. You then pay it in instalments on the due dates. The percentages and dates are in Section 408 (see the related topic on instalments).

Your estimate is not final. Income can rise or fall during the year. If you see that the tax will be higher or lower, you revise your estimate and adjust the next instalment. You do not need to file anything with the department for this. You simply pay the revised cumulative amount by the due date.

Capital gains and casual income (lottery, game winnings and similar) are lumpy. You cannot predict them in June. So the rule is practical. If such income arises after an instalment date, the tax on it is included in the cumulative amount due at the next instalment date on or after the date it arose. It stays in the cumulative total for the later dates and is paid once, not again. If it arises after the last instalment date of 15 March, you pay the whole tax on it by 31 March.

To pay, use the e-Pay Tax facility on the income-tax e-filing portal or an authorised bank. Choose the tax year, select advance tax as the type of payment, and pay. Keep the challan details. You need them to claim credit when you file the return.

Key rules to remember

Advance tax payable
Tax on estimated total income − TDS/TCS expected to be credited
Advance tax is payable if this balance is ₹10,000 or more. Check the threshold and the exemption for resident senior citizens without business income in your Section 408 notes.
Cumulative instalments (non-presumptive assessee)
By 15 June: 15% | By 15 September: 45% | By 15 December: 75% | By 15 March: 100%
These percentages are cumulative, not separate. Each is a percentage of the advance tax payable for the year.
Revised estimate
Revised cumulative % × revised advance tax − amount already paid = payment due now
Apply the percentage of the next due date to the new figure. Do not wait for the year end.
Capital gains / casual income arising after an instalment date
Tax on that income is included in the cumulative amount due at the next instalment date on or after it arises, and stays in the cumulative total after that
It is paid once, as part of the cumulative amount. If it arises after 15 March, pay the whole tax on it by 31 March.

How to solve Payment of Advance Tax on Own Accord (Section 406) questions

Use this method for any question on paying advance tax on your own accord, including revised estimates and capital gains.

  1. 1Find the assessee type and the tax year. Check whether the assessee is under a presumptive scheme, since that changes the due dates.
  2. 2Compute estimated total income and the tax on it. Add surcharge and cess where applicable.
  3. 3Deduct the TDS and TCS expected to be credited. The result is the advance tax payable. Check that it meets the ₹10,000 threshold.
  4. 4Split the regular income tax over the cumulative instalments of 15%, 45%, 75% and 100%.
  5. 5Note the date on which capital gains or casual income arises. Include the tax on it in the cumulative amount due at the next instalment date on or after that date. It then stays in the cumulative total for the later dates and is paid once, not repeatedly. Earlier cumulative amounts stay unchanged. A gain arising before 15 June is included from 15 June. A gain arising between two dates is included from the later date.
  6. 6If the estimate is revised, recompute the cumulative amount due at the next date and subtract what has already been paid.
  7. 7Show a table of date, cumulative amount due, paid so far and amount to pay now. State the final payment and mention challan credit.

Quickest way: Cumulative table method

When to use it: Use it when a question gives a revised estimate or a mid-year capital gain and asks how much to pay on a given date.

  1. Draw four rows: 15 June, 15 September, 15 December and 15 March.
  2. Fill in the cumulative percentage on the regular tax: 15%, 45%, 75%, 100%.
  3. Add the tax on the capital gain or casual income to the cumulative amount at the first row on or after the date it arose, and carry it in the cumulative total of the later rows. It is paid once, not again in each row.
  4. Subtract the total already paid from the row you are asked about.
  5. Check that the last row equals the total advance tax.

Common mistakes in Payment of Advance Tax on Own Accord (Section 406)

  • Treating 15%, 45%, 75% and 100% as separate amounts of each instalment

    The percentages look like slices of the year's tax.

    Fix: Remember they are cumulative. The September payment is 30% of the year's tax (45% − 15%), if June was paid in full.

  • Spreading the tax on capital gains over all four instalments

    Students apply the regular pattern to every income.

    Fix: Include it only from the first instalment date on or after the date the gain arose. A gain arising in November is included in the cumulative amount due by 15 December. It stays in the 15 March total and is paid once.

  • Ignoring TDS and TCS before arriving at advance tax

    The question gives tax on total income, and students apply the percentages directly.

    Fix: Deduct expected TDS/TCS first. Apply percentages only to the balance.

  • Waiting for a notice from the Assessing Officer before paying

    Students confuse own-accord payment with payment on a notice or order.

    Fix: Section 406 means you act first. No notice is needed.

  • Not revising the estimate when income changes

    Students think the June estimate binds them for the whole year.

    Fix: Revise at the next instalment and pay the revised cumulative amount, less what you have already paid.

  • Paying a gain arising after 15 March in the next tax year

    Students think 15 March is the last day for any advance tax.

    Fix: The whole tax on such gain or casual income is paid by 31 March of that tax year.

Worked examples

Example 1

Mr Mehta, a resident individual, estimates advance tax of ₹2,00,000 on his regular income for the tax year 2026-27, after TDS. On 20 November 2026 he sells shares and earns a capital gain on which the tax is ₹60,000. He paid ₹90,000 by 15 September 2026. How much must he pay by 15 December 2026, and by 15 March 2027?

Show the solution
  1. Cumulative tax on regular income: 15 June 15% = ₹30,000; 15 September 45% = ₹90,000; 15 December 75% = ₹1,50,000; 15 March 100% = ₹2,00,000.
  2. The gain arose on 20 November, after the September instalment. So the ₹60,000 is included in the cumulative amount from the next date, 15 December, and stays in the 15 March total.
  3. Cumulative due by 15 December: ₹1,50,000 + ₹60,000 = ₹2,10,000.
  4. Payment on 15 December: ₹2,10,000 − ₹90,000 already paid = ₹1,20,000.
  5. Cumulative due by 15 March: ₹2,00,000 + ₹60,000 = ₹2,60,000.
  6. Payment on 15 March: ₹2,60,000 − ₹2,10,000 = ₹50,000.

Answer: ₹1,20,000 by 15 December 2026 and ₹50,000 by 15 March 2027. Total advance tax for the year is ₹2,60,000.

Example 2

Ms Rao, a salaried resident individual with other income, estimated in June 2026 that her advance tax for 2026-27 would be ₹80,000 and paid the first instalment. In September 2026 she revises the estimate to ₹1,20,000. Compute the payment due by 15 September 2026, and the instalments due by 15 December 2026 and 15 March 2027.

Show the solution
  1. June instalment paid: 15% × ₹80,000 = ₹12,000.
  2. Revised cumulative due by 15 September: 45% × ₹1,20,000 = ₹54,000.
  3. Payment on 15 September: ₹54,000 − ₹12,000 = ₹42,000.
  4. Cumulative due by 15 December: 75% × ₹1,20,000 = ₹90,000.
  5. Payment on 15 December: ₹90,000 − ₹54,000 = ₹36,000.
  6. Payment on 15 March: ₹1,20,000 − ₹90,000 = ₹30,000.

Answer: She pays ₹42,000 by 15 September 2026, ₹36,000 by 15 December 2026 and ₹30,000 by 15 March 2027. Total paid is ₹1,20,000.

Exam tips

  • Always draw the cumulative table. It earns step marks even if one number slips.
  • Read the date a capital gain or casual income arises carefully. It decides which instalment date first carries the extra tax.
  • In MCQs with no negative marking, eliminate options that treat percentages as non-cumulative, then attempt the rest.
  • Write one line stating that the payment is on own accord under Section 406, without a notice. Then give the computation.
  • Cross-study this topic with instalment dates and interest for default. Questions often combine them.

Practice questions from Advance Tax

Payment of Advance Tax on Own Accord (Section 406) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Payment of Advance Tax on Own Accord (Section 406): frequently asked questions

What does paying advance tax on own accord mean?

It means you estimate your income and tax yourself and pay on the due dates. You do not wait for a notice or order from the Assessing Officer.

How do I pay advance tax on capital gains that arise late in the year?

Include the tax on that gain in the cumulative amount due at the next instalment date on or after it arises. It stays in the cumulative total after that and is paid once. If it arises after 15 March, pay the whole tax by 31 March. The same approach applies to casual income.

Can I change my advance tax estimate later in the year?

Yes. Revise your estimate and pay the revised cumulative amount at the next due date, after subtracting what you have already paid.

How do I pay advance tax online?

Use the e-Pay Tax facility on the income-tax e-filing portal or an authorised bank. Select the tax year and advance tax as the payment type, pay, and keep the challan details. You need them to claim credit in your return.