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CMA Intermediate · Direct and Indirect Taxation · Advance Tax

Under section 406 of the Income-tax Act, 2025, on what base does an assessee who is liable to pay advance tax compute the advance tax payable on his own accord?

Advance tax on one's own accord is computed on the specified sum, which section 406 defines as current income as estimated by the assessee. It is not based on earlier assessed or returned income, since that approach applies to the Assessing Officer's order route.

  1. AThe total income of the preceding year as assessed in the last regular assessment
  2. BCurrent income as estimated by the assesseeCorrect
  3. CThe income declared in the last return of income filed
  4. DThe income determined by the Assessing Officer in an order

Explanation

Section 406(3) defines 'specified sum' as current income as estimated by the assessee. Advance tax on own accord is computed on this specified sum. The last assessed income is the base only under section 407, where the Assessing Officer issues an order, so the first option is wrong.

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