§234A / 234B / 234C Interest Calculator

⚡ In shortSections 234A, 234B and 234C each charge 1% per month, but for three different failures — filing late, under-paying advance tax overall, and missing an individual instalment. Most notices combine two or three of them.

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How it is calculated

234A applies when you file the ITR after the due date: 1% per month on the tax still unpaid, from the day after the due date until you file. 234B applies when the advance tax you paid across the year is under 90% of your assessed tax: 1% per month on the shortfall, running from 1 April of the assessment year until it is paid. 234C penalises deferment of a specific instalment: the targets are 15%, 45%, 75% and 100% by 15 June, 15 September, 15 December and 15 March, and interest runs at 1% per month for three months on each of the first three shortfalls and one month on the last. Importantly 234C has a built-in tolerance — pay at least 12% by 15 June and 36% by 15 September and no interest arises on those instalments even though the targets are higher. Presumptive taxpayers under 44AD/44ADA sidestep 234C entirely by paying 100% by 15 March.

Three sections, three different failures

Section 234A charges interest for filing the return late. Section 234B charges interest where advance tax paid falls short of 90% of the assessed liability. Section 234C charges interest where an individual advance-tax instalment fell short of its prescribed percentage. All three run at 1% per month, which is why they are so easily conflated — but they measure different things and can apply simultaneously.

234A applies only to unpaid tax

Interest under 234A runs from the day after the due date until the return is filed, on the tax still outstanding. A taxpayer whose liability was already covered by TDS therefore pays little or no 234A interest even when filing very late — although the section 234F late fee still applies, because that is triggered by the delay itself rather than by any balance owing.

234B and 234C can both apply to the same year

234B looks at the total: if aggregate advance tax was under 90% of the assessed liability, interest runs from April until assessment. 234C looks at each instalment: if any of the four cumulative milestones — 15%, 45%, 75%, 100% — was missed, interest runs for the deferment period. It is entirely possible to satisfy 234B by paying the right total while still owing 234C for paying it in the wrong rhythm.

Part of a month is a whole month

All three sections compute on calendar months, with any part of a month counted in full. A single day past a month boundary costs the same as thirty. This makes the practical advice unusually blunt: if a payment or a filing is overdue, doing it today rather than early next month can save a full month's interest on the entire amount.

The capital-gains relief inside 234C

You cannot forecast in June that you will sell an asset in December, so 234C interest is not charged on capital gains and certain other unforeseeable income provided the full tax on them is paid in the instalment immediately following the transaction — or by 31 March where it arises after the last instalment date. Miss that instalment and the relief is lost entirely. The advance tax calculator sets out the instalment schedule.

Frequently asked questions

What is the difference between 234B and 234C?

234B is about the year as a whole — it applies if your total advance tax is under 90% of the assessed tax. 234C is about timing — it applies if a particular instalment fell short of its 15/45/75/100% target, even if you paid everything by 15 March.

Can I avoid 234A by paying the tax but filing late?

Largely yes. 234A is charged on the tax that remains unpaid, so if you have already paid the tax through TDS or self-assessment, the 234A interest is nil or small — though the §234F late-filing fee still applies.

Is 234C really unavoidable if I earn irregularly?

Not always. The law relaxes 234C for income that could not be estimated in advance — such as capital gains or a lottery win — provided you pay the tax on it in the remaining instalments.

Is the interest calculated on full months?

Yes. Any part of a month counts as a whole month, so filing even one day into a new month adds another 1%.