Income-tax law | Advance tax | Updated 27 October 2026

Section 218 of the Income-tax Act, 1961: When an Assessee Is Deemed to Be in Default

Section 218 addresses default in paying certain advance-tax instalments. It must be read together with Sections 210 and 211 of the Income-tax Act, 1961. For periods governed by the Income-tax Act, 2025, refer to the corresponding provisions of that Act.

Meaning of an assessee in default under Section 218

An assessee is a person liable to tax or another sum under the Act, including persons treated as assessees by its provisions. Advance tax is income tax paid during the financial year before final assessment, according to the applicable statutory schedule. An assessee in default is a person whom the law treats as having failed to meet a specified tax-payment obligation.

When Section 218 applies

Under the wording published by the Income Tax Department for 2025, an assessee is deemed to be in default in respect of the relevant instalment or instalments if:

1. an instalment required by an Assessing Officer's order under Section 210(3) or 210(4) is not paid by the date prescribed under Section 211(1), and the assessee does not give the required intimation under Section 210(5) on or before the relevant due date; or
2. the assessee does not pay advance tax based on the estimate of current income under Section 210(6).

The precise consequences depend on the applicable assessment or tax year, the statutory wording governing that period, and any notices or orders issued.

Connected provisions and their functions

Position under the Income-tax Act, 2025

The Income-tax Act, 2025 came into force on 1 April 2026. The Income Tax Department's official section-mapping material identifies Section 409 as the corresponding provision to Section 218 of the 1961 Act. The law applicable to a particular tax period, including transitional and saving provisions, must be checked before relying on either provision.

See the official section-mapping navigator and the Income Tax Department portal for current legislation and updates.

Illustrative example

Suppose an Assessing Officer requires an assessee to pay an advance-tax instalment under Section 210(3). If the assessee fails to pay it by the applicable Section 211 due date and also fails to submit the required Section 210(5) intimation by that date, Section 218 may deem the assessee in default for that instalment. This is an illustration, not a determination of liability in any individual case.

Frequently asked questions

Does Section 218 itself prescribe a 15% interest rate?

No. The old webpage reproduced material concerning historical Section 217, including a 15% rate. That material should not be treated as the current wording of Section 218. Interest on advance-tax defaults is addressed separately by applicable provisions, including Sections 234B and 234C for relevant years under the 1961 Act.

Is every late advance-tax payment covered by Section 218?

Not necessarily. Section 218 specifies particular circumstances involving orders, intimation and estimates under Section 210. Other provisions may impose interest or consequences for different failures.

What is the corresponding provision under the Income-tax Act, 2025?

The official legislative mapping identifies Section 409. Consult the enacted text and transitional rules for the tax year concerned.

Official statutory references

• Income Tax Department: Section 218 (2025 version of the 1961 Act)
• Income-tax Act, 1961 as amended by Finance Act, 2025 (official PDF)
• Official section-mapping navigator for the 2025 legislation

This article provides general legal information. Confirm the applicable law, dates, notifications and individual facts before taking action.