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Section 234B & 234C Interest Calculator — Advance Tax Shortfall

When a client's advance tax payments fall short of what the Income Tax Act requires, interest is charged under two separate sections that are easy to conflate. Section 234B penalises the year-end shortfall — if total advance tax paid by 31 March is less than 90% of the assessed tax, interest runs at 1% per month from 1 April until the balance is paid off through self-assessment tax. Section 234C penalises deferment at each instalment date (15 June for companies, 15 September, 15 December, and 15 March for everyone) independently of the year-end position, so a taxpayer can owe 234C interest even if they eventually pay 100% of their tax by March. This calculator computes both, instalment by instalment, so you can show clients exactly where the shortfall occurred and how much it is costing them.

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Enter the total tax liability to see the 234B and 234C interest breakdown.

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Frequently Asked Questions

What is the difference between Section 234B and Section 234C?+
Section 234B charges interest when total advance tax paid by 31 March is less than 90% of the assessed tax — interest runs from 1 April until the tax is paid. Section 234C charges interest separately for each instalment where the cumulative advance tax paid by the due date (15 June, 15 September, 15 December) falls short of the required percentage, regardless of the year-end position.
Is there any relaxation before Section 234C interest applies?+
Yes. A 10% buffer applies to each instalment except the final one — for example, a non-corporate taxpayer paying at least 27% of assessed tax by 15 September (instead of the full 30%) is not charged 234C interest for that instalment. No such buffer applies to the 15 March instalment, which requires 100%.
How many months of interest does Section 234C charge?+
Three months of interest at 1% per month for shortfalls at the June, September, and December instalments; one month for a shortfall at the March instalment. Part of a month counts as a full month.
Does Section 234B interest stop once the return is filed?+
No — 234B interest continues to accrue from 1 April until the date the shortfall is actually paid off (typically via self-assessment tax), not the return filing date. If self-assessment tax is paid late, the interest period is longer.
Are senior citizens without business income liable for 234B/234C interest?+
No. Resident senior citizens (60 years or above) who do not have any income from business or profession are exempt from paying advance tax altogether, and therefore cannot be charged interest under Section 234B or 234C.

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