Interest 234A, 234B, 234C
What late filing and short advance tax cost
Worked example
Using the default values, interest 234a, 234b, 234c gives a total interest payable of ₹28,100.
| Item | Value |
|---|---|
| Tax for the year | ₹2,00,000 |
| Less TDS and TCS | ₹0 |
| Assessed tax | ₹2,00,000 |
| Advance tax paid | ₹0 |
| Shortfall | ₹2,00,000 |
| 15 June — 15% | ₹900 |
| 15 September — 45% | ₹2,700 |
| 15 December — 75% | ₹4,500 |
| 15 March — 100% | ₹2,000 |
| Interest under 234C | ₹10,100 |
| Applies | Yes |
| Months charged | 6 |
| Interest under 234B | ₹12,000 |
| Due date | 31 July 2027 |
| Months late | 3 |
| Interest under 234A | ₹6,000 |
| Interest | ₹28,100 |
| Tax plus interest | ₹2,28,100 |
What you need
- Total tax for the year
- TDS and TCS already credited
- Advance tax paid by 15 June
- Paid by 15 September (cumulative)
- Paid by 15 December (cumulative)
- Paid by 15 March (cumulative)
- Return filed on
- Presumptive taxpayer
Questions
What is the difference between 234B and 234C?
234C penalises missing the quarterly instalment targets during the year. 234B penalises ending the year having paid less than 90% of your tax in advance. You can be charged both.
How do I avoid 234C entirely?
Pay at least 12% of your tax by 15 June, 36% by 15 September, 75% by 15 December and 100% by 15 March. The first two thresholds are lower than the headline 15% and 45% because the law allows a margin.
Do presumptive taxpayers pay quarterly?
No. Under 44AD and 44ADA the whole advance tax is due in one instalment by 15 March, which is why the schedule above collapses to a single row when you select that option.
Important
All three sections charge 1% a month, and any part of a month counts as a full month. 234C is relaxed for the first two instalments: pay at least 12% by 15 June and 36% by 15 September and no interest arises even though the targets are 15% and 45%. 234B applies only where assessed tax is ₹10,000 or more and less than 90% was paid in advance. The due date assumed here is 31 July; audit cases have until 31 October. Capital gains and lottery income arising late in the year are excluded from 234C on the earlier instalments — not modelled here.