Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Estimate advance-tax deferment and default interest using cumulative instalments, statutory tolerance tests and a user-selected calculation date.
Estimate advance-tax deferment and default interest
Interest estimate
This is a standard computation without relief for unexpected capital gains, lottery income, first-time dividend or other statutory exclusions.
234C / deferment interest
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234B / default interest
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Instalment
Interest
15 June
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15 September
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15 December
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15 March
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Total estimated interest
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Income-tax Act, 2025 note: Section 234B (advance tax shortfall interest) is renumbered as Section 424, and Section 234C (instalment deferment interest) as Section 425, under the Income-tax Act, 2025, effective FY 2026-27. Verify against the Gazette text before citing in a filing.
How This Is Calculated
If assessed tax is ₹10,000 or more, shortfall against the required cumulative instalment percentages (15%/45%/75%/100% by 15 June/Sep/Dec/Mar) attracts interest under Section 234C at 1% per month for each shortfall period. If total advance tax paid by 31 March is less than 90% of assessed tax, additional interest under Section 234B applies at 1% per month from 1 April until the tax is fully paid.
Frequently Asked Questions
What is the difference between Section 234B and 234C interest?
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Section 234C charges interest for shortfall in individual quarterly instalments during the year — even if you pay the full amount by year-end, paying too little at an earlier instalment date still attracts 234C interest for that period. Section 234B charges interest if your total advance tax paid by 31 March is less than 90% of your assessed tax, running from 1 April until payment.
Is there a minimum threshold below which advance tax interest doesn't apply?
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Yes. If your assessed tax liability for the year is below ₹10,000, advance tax isn't required at all, and neither 234B nor 234C interest applies.
What is the interest rate for advance tax shortfall?
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Both Section 234B and 234C interest are charged at 1% per month (or part of a month) on the shortfall amount.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
Keep the calculator’s period assumptions visible. Section 234B/234C calculations can depend on assessed tax, credits, instalment dates, presumptive-tax rules and statutory relief for specified income arising after instalment dates.
Practical verification checklist
Confirm assessed-tax base and credits.
Use actual payment dates/amounts.
Manually review statutory exceptions for uneven/unexpected income.
Use the controlling statute, notified rule/instrument, official portal and later authoritative treatment for the relevant date. This page remains an educational/professional reference.
Methodology, assumptions and sources
Scope: Computes interest payable under Section 234B (default in payment of advance tax) and Section 234C (deferment of advance tax instalments).
Calculation logic
Section 234B: interest = 1% per month (or part of a month) on the shortfall between assessed tax and advance tax paid, where advance tax paid is less than 90% of assessed tax, calculated from 1 April of the assessment year until the date of payment/assessment.
Section 234C: interest = 1% per month for the shortfall in each quarterly instalment against the statutorily prescribed cumulative percentage (15%/45%/75%/100%), calculated for a fixed number of months per quarter (3 months for the first three shortfalls, 1 month for the final instalment shortfall).
Sum the two components (where both apply) to arrive at total advance-tax interest payable.
Inputs and assumptions
'Assessed tax' for this computation means total tax liability minus TDS/TCS credit, consistent with the statutory definition used for both sections.
Presumptive-taxation taxpayers under Sections 44AD/44ADA are only liable for 234C shortfall relative to the single 15 March instalment, which the calculator applies where selected.
Exclusions and edge cases
Does not compute Section 234A (interest for late filing of return) — that is a separate provision from advance tax interest and is addressed by the ITR Late-Filing calculator.
Interest is computed on the assessed/self-assessed tax figure entered; actual assessment by the department could differ if income is later revised.