Interest Calculator — Sections 234A, 234B & 234C

Quick answer

Interest under Sections 234A, 234B and 234C is charged at 1% per month (part of a month counts as a full month). 234A applies when you file your return after the due date with tax still unpaid. 234B applies when advance tax paid is less than 90% of your tax after TDS. 234C applies when you miss or short-pay an advance tax instalment. 234B and 234C come in only when your tax after TDS is ₹10,000 or more.

What each section charges interest for

The three sections punish three different delays. They can apply together on the same tax, which is why a few months of delay can add up to a noticeable amount.

• Section 234A — late return. Interest for filing after the due date, on the tax that was still unpaid on the due date. It runs from the day after the due date until the date you file.
• Section 234B — advance tax shortfall. Interest if your total advance tax for the year was less than 90% of your tax after TDS. It runs from 1 April of the assessment year until you pay the balance (usually when you file).
• Section 234C — instalment delay. Interest for paying less than the required share of advance tax by each instalment date: 15 June, 15 September, 15 December and 15 March.

Think of it this way: 234C looks at the timing within the financial year, 234B looks at whether you paid enough by 31 March, and 234A looks at whether you filed on time. A person who pays nothing until filing late can face all three.

A note on the new law: the Income-tax Act, 2025 applies from 1 April 2026 and uses the term "tax year". From tax year 2026-27 it renumbers sections like 234A, 234B, 234C and 234F. This calculator keeps the familiar numbers and follows the 1% per month rates shown here.

How to use this interest calculator

The calculator has eight fields. Fill them from your tax computation and your challans.

1. Total tax for the year — your final tax liability after the 87A rebate, including surcharge and 4% cess. If you have not worked it out, use our income tax calculator first. Add tax on capital gains if any.
2. TDS / TCS already deducted — the total shown in your Form 26AS and AIS, including TDS on salary, FD interest, rent and so on. The calculator subtracts this to get the tax you were supposed to pay yourself.
3. Advance tax paid by 15 June — challans paid up to and including 15 June.
4. Advance tax paid 16 June – 15 September — only the amount paid in this window, not the running total.
5. Advance tax paid 16 September – 15 December — again, only this window.
6. Advance tax paid 16 December – 15 March — the last window. Payments made up to 31 March also count as advance tax for the year; include them here.
7. Your ITR due date — usually 31 July for individuals without audit, unless extended. Check with our ITR due date checker.
8. Date you filed / will file (and pay the balance) — the calculator assumes the remaining tax is paid on this date.

The result shows interest under each section separately, the balance tax still payable and how much advance tax you paid against what was due.

The ₹10,000 threshold

The calculator first works out your tax after TDS: total tax minus TDS/TCS. If this is below ₹10,000, you were not required to pay advance tax at all, so no interest under 234B or 234C applies. The result then simply says so.

This is why most salaried people with only salary income never see 234B or 234C. Their employer's TDS covers almost all their tax. Interest becomes relevant when you have income without enough TDS — capital gains, rent, freelance or business income, or a large interest income from a source that did not deduct enough TDS.

Who typically ends up paying this interest

• Freelancers and consultants whose clients deduct TDS at a lower rate than their actual slab rate, leaving a large balance at year end.
• Small business owners with regular books who wait for final accounts and then pay all tax at filing time.
• Investors who sold shares, mutual funds or property during the year and did not pay advance tax on the gain.
• Landlords with rent from tenants who are not required to deduct TDS.
• Salaried people with two employers in one year, where neither employer knew about the other salary.
• Retirees under 60 with large FD interest, where bank TDS at 10% does not cover tax at higher slabs.

Note that 234A is different in principle: it depends on filing late with unpaid tax, not on the advance tax threshold. In this calculator, when tax after TDS is below ₹10,000, the result focuses on 234B and 234C, which do not apply; if you also file late with a small balance, 234A at 1% a month on that balance still applies under the law.

The formulas, explained simply

In the formulas below, "tax after TDS" means total tax minus TDS/TCS.

Section 234A

Interest = 1% × number of months late × unpaid tax. Months are counted from the day after the due date to the filing date, and any part of a month counts as a full month. Unpaid tax is tax after TDS minus all advance tax paid, rounded down to the nearest ₹100. If you file on or before the due date, 234A is nil.

For a 31 July due date: filing on 20 September is 2 months (August, September); filing on 31 December is 5 months (August to December).

Section 234B

If total advance tax is less than 90% of tax after TDS: interest = 1% × months from 1 April of the assessment year to the date of payment × shortfall. The shortfall is tax after TDS minus advance tax paid, rounded down to ₹100. If you paid 90% or more as advance tax, 234B is nil, even if a small balance remains.

Because the clock starts on 1 April, 234B runs even if you file before the due date. Paying the balance on 25 July still means April, May, June and July: 4 months.

Section 234C

234C looks at the cumulative advance tax paid by each instalment date and compares it to the required share. The calculator applies these rules:

The 12% and 36% bands give a little breathing room for the first two instalments. If you paid at least 12% by 15 June, there is no 234C for June; but if you paid 10%, interest is on the full gap up to 15%, not just up to 12%. There is no such cushion for December and March.

Interest rates and periods at a glance

This is simple interest, not compounded. It is also not a deductible expense: you cannot claim interest paid under these sections against your income.

Worked examples with real numbers

Example 1: No advance tax, filed late

Vikram has rental and interest income along with salary. His total tax for FY 2025-26 is ₹1,50,000, and TDS was ₹50,000. He paid no advance tax. His due date was 31 July 2026 and he files and pays on 15 November 2026.

• Tax after TDS: ₹1,50,000 − ₹50,000 = ₹1,00,000. This is above ₹10,000, so advance tax was required.
• 234C: June 1% × 3 × ₹15,000 = ₹450; September 1% × 3 × ₹45,000 = ₹1,350; December 1% × 3 × ₹75,000 = ₹2,250; March 1% × ₹1,00,000 = ₹1,000. Total ₹5,050.
• 234B: advance tax paid (nil) is below 90%. April to November 2026 = 8 months. 1% × 8 × ₹1,00,000 = ₹8,000.
• 234A: August to November = 4 months. 1% × 4 × ₹1,00,000 = ₹4,000.

Total interest: ₹5,050 + ₹8,000 + ₹4,000 = ₹17,050, on top of ₹1,00,000 tax. He also owes the late filing fee under 234F, which our late filing fee calculator works out.

Example 2: Paid 90% exactly, filed on time

Pooja is a consultant. Her tax is ₹2,40,000 and TDS is ₹40,000, so tax after TDS is ₹2,00,000. She paid advance tax of ₹30,000 by 15 June, ₹60,000 by 15 September, ₹40,000 by 15 December and ₹50,000 by 15 March. She files on 25 July 2026, before the due date.

• Cumulative paid: ₹30,000 (15%) by June, ₹90,000 (45%) by September, ₹1,30,000 (65%) by December, ₹1,80,000 (90%) by March.
• 234C: June and September are fine. December: required ₹1,50,000, paid ₹1,30,000, short ₹20,000 → 1% × 3 × ₹20,000 = ₹600. March: short ₹20,000 → 1% × ₹20,000 = ₹200. Total ₹800.
• 234B: she paid ₹1,80,000, exactly 90% of ₹2,00,000, so nil.
• 234A: filed on time, so nil.

Total interest is just ₹800. She pays the remaining ₹20,000 as self-assessment tax before filing. Had she paid even ₹1 less in advance tax, 234B would have applied for April to July.

Example 3: Using the 12% and 36% cushions

Anil's tax after TDS is ₹1,00,000. He pays ₹12,000 by 15 June, ₹24,000 by 15 September, ₹39,000 by 15 December and ₹25,000 by 15 March. He files on 20 July 2026.

• Cumulative: ₹12,000 (12%), ₹36,000 (36%), ₹75,000 (75%), ₹1,00,000 (100%).
• June: 12% paid, which meets the cushion → no interest. September: 36% paid → no interest. December and March: fully met.
• 234C, 234B and 234A: all nil.

The cushions only help if you meet them exactly or better. At ₹11,900 by June, interest would be on the full ₹3,100 gap to 15%.

Example 4: Late start on advance tax, filed a little late

Farah's tax is ₹1,80,000 and TDS is ₹1,00,000, so tax after TDS is ₹80,000. She paid nothing until December: ₹20,000 between 16 September and 15 December and ₹20,000 between 16 December and 15 March. She files and pays the balance on 10 September 2026, after a 31 July due date.

• 234C: June 1% × 3 × ₹12,000 = ₹360; September 1% × 3 × ₹36,000 = ₹1,080; December required ₹60,000, paid ₹20,000 → 1% × 3 × ₹40,000 = ₹1,200; March short ₹40,000 → ₹400. Total ₹3,040.
• 234B: paid ₹40,000, below 90% (₹72,000). Shortfall ₹40,000 for April to September = 6 months → ₹2,400.
• 234A: August and September = 2 months × 1% × ₹40,000 → ₹800.

Total interest: ₹6,240. The balance of ₹40,000 plus interest is paid before filing.

Example 5: Salaried person who changed jobs

Rahul changed jobs in the middle of the year and did not tell his new employer about his earlier salary. Each employer deducted TDS as if its salary was his only income, so both applied the lower slabs. His actual tax for the year is ₹1,45,000, but total TDS is only ₹1,20,000. He paid no advance tax and files on 28 July 2026, before the due date.

• Tax after TDS: ₹25,000. This is above ₹10,000, so advance tax was required, even though he is salaried.
• 234C: June 1% × 3 × ₹3,750 = ₹112.50; September 1% × 3 × ₹11,250 = ₹337.50; December 1% × 3 × ₹18,750 = ₹562.50; March 1% × ₹25,000 = ₹250. Total ₹1,262.50.
• 234B: nothing paid, so April to July = 4 months × 1% × ₹25,000 = ₹1,000.
• 234A: filed on time, so nil.

Total interest is about ₹2,263. This situation is very common. Giving your new employer the previous employer's salary and TDS details (through Form 12B) lets TDS be corrected during the year and avoids this interest.

Why 234A and 234B can both run for the same months

In Example 1, Vikram paid 234B interest for April to November and 234A interest for August to November on the same ₹1,00,000. That looks like double interest for August to November, and it is. The two sections punish different failures: 234B for not paying advance tax during the year, 234A for not filing the return on time. The law charges them independently.

The practical lesson is that for someone with an advance tax shortfall, every month of delay after the due date costs 2% a month on the unpaid tax, not 1%. If you cannot file on time because some document is pending, at least pay your estimated balance as self-assessment tax before the due date. That stops both clocks on the amount paid, and you can file the return shortly after.

If the department extends the due date for filing, read the notification carefully. Extension notifications have sometimes said that the extension does not apply for 234A purposes in certain cases, such as where the self-assessment tax is above a specified amount. Paying your balance early avoids this question entirely.

Special cases the calculator does not fully cover

The calculator gives a close estimate for the usual case. These situations change the result, so read them if any apply to you.

Presumptive income under 44AD or 44ADA

If you declare business or professional income on a presumptive basis, you pay all your advance tax in one instalment by 15 March. For 234C, only the March shortfall matters. The calculator uses the four-instalment schedule, so if you are a presumptive taxpayer and enter nothing for the first three windows, its 234C figure will be higher than what actually applies. In that case, count only 1% of the shortfall at 15 March.

Capital gains or dividend arising later in the year

You cannot pay advance tax on a capital gain before you make it. The law recognises this. If the shortfall in an early instalment is because of capital gains or dividend income received after that date, no 234C interest is charged on that part, provided you pay tax on it in the remaining instalments (or by 31 March if it arose after 15 March). The calculator does not split income by date, so it may show more 234C interest than actually applies. Your expert can apply this relief in the final computation.

Resident senior citizens without business income

Resident individuals aged 60 or more who have no business or professional income are not required to pay advance tax. For them, 234B and 234C do not apply. 234A can still apply if they file late with tax unpaid.

Self-assessment tax paid in between

If you paid part of the balance as self-assessment tax before filing, for example in June, then interest under 234B and 234A runs on the reduced amount after that date. The calculator assumes the entire balance is paid on the filing date, so it may slightly overstate interest in this case.

Rounding and exact dates

The department rounds the amount on which interest is charged down to the nearest ₹100 and works with exact dates. The calculator rounds for 234A and 234B but not for 234C, so the portal's figure may differ by a small amount.

How to reduce or stop the interest

• Pay as soon as you know. 234B and 234A grow every month. Paying the balance today stops the meter for the months ahead, even if you file the return later.
• Catch up at the next instalment. If you missed June, pay enough by 15 September to reach 45%. You still pay June's 234C, but you avoid September's.
• Reach 90% by 31 March. Even a late payment in March that takes you to 90% avoids 234B completely.
• Ask your employer to deduct more TDS. If you are salaried with other income, you can declare that income to your employer so TDS covers it. TDS is spread through the year, which reduces both advance tax and interest worries.
• Re-estimate before each date. Income changes during the year. Before 15 September, 15 December and 15 March, revisit your estimate with the latest figures — bonus, client payments, share sales — and adjust the next instalment, so you do not discover a large gap only at filing time.
• File on time. Filing by the due date removes 234A and the 234F late fee, whatever else happens.

Our advance tax calculator shows how much to pay by each date for the current year, so next year the interest can be avoided.

Common mistakes when calculating 234A, 234B and 234C

• Entering cumulative amounts in each box. Each advance tax field is for payments made in that window only. The calculator adds them up for you. Entering running totals will make the result look better than it is.
• Forgetting TDS on FD interest or rent. Check Form 26AS and AIS. Missing TDS inflates your tax after TDS and the interest.
• Using tax before cess. Advance tax and interest are on total tax including surcharge and cess. Leaving out the 4% cess understates everything slightly.
• Counting days, not months. Part of a month is a full month. Paying on 1 August against a 31 July due date already means one month of 234A.
• Assuming filing on time stops 234B. It does not. 234B starts on 1 April. Filing on time only removes 234A.
• Ignoring tax on capital gains. A large share or property sale during the year often creates the advance tax shortfall. Include the tax on it in the total.

How the interest fits into your return

When you prepare your ITR, the utility computes 234A, 234B and 234C automatically from the tax liability and the payments you enter. The interest is added to your tax payable. Before you submit, you must pay the full balance — tax plus interest plus any 234F fee — as self-assessment tax.

Pay through Challan 280 on the income tax e-filing portal under e-Pay Tax. Choose self-assessment tax for balance payments and advance tax for payments during the financial year. Then enter each challan's BSR code, date and serial number in the taxes paid schedule. Wrong challan details are a common reason for a demand notice after processing.

When the department processes your return, it recomputes interest to exact dates. If its figure is higher than what you paid, you get an intimation with a small demand. If you disagree, you can respond on the portal.

When to take expert help

An expert review is worth it when:

• you had capital gains or dividends at different points in the year and want the 234C relief applied;
• you are a presumptive taxpayer and the calculator's 234C looks too high;
• you paid self-assessment tax in parts and need an exact 234A and 234B figure;
• you have received an intimation with an interest demand that does not match your working;
• you have business income and want to plan advance tax for next year to avoid interest altogether.

Our income tax filing service covers the full computation, the challans and the return.

Get it checked by an expert

Interest under these sections depends on exact dates and amounts, and small slips can lead to a demand later. A TaxCaller expert can check your tax, TDS and advance tax challans, apply any relief you are entitled to, compute the final 234A, 234B and 234C figures and file your return. The fee is told upfront, and the first call is free. Keep your Form 26AS, AIS and challan details ready.