Skip to main content

Advance Tax Calculator — §234C Interest on Quarterly Instalments

Advance tax §234C inputs
Total §234C interest
₹450

Q1 interest (×3 months)
₹450
Q2 interest (×3 months)
₹0
Q3 interest (×3 months)
₹0
Q4 interest (×1 month)
₹0

What is advance tax?

Advance tax is the mechanism by which taxpayers with significant non-TDS income pay their tax liability in quarterly instalments during the financial year — rather than in a single lump sum at filing time. The IT Act requires this to ensure steady government revenue.

If your estimated tax liability (after TDS) exceeds ₹10,000 for the year, you must pay advance tax.

Quarterly schedule

Due DateCumulative % of net taxShortfall months (§234C)
15 June15%3 months
15 September45%3 months
15 December75%3 months
15 March100%1 month

Net tax = total tax liability − TDS deducted at source.

How §234C interest is calculated

For each quarter:
  required_Q  = net_tax × quarter_pct%
  shortfall_Q = max(0, required_Q − cumulative_paid_Q)
  interest_Q  = shortfall_Q × 1% × interest_months

Total §234C = sum of interest across all 4 quarters

The percentages are cumulative — if you paid ₹45K by Q2, that covers Q1 + Q2 combined. A Q1 shortfall does not automatically affect Q2.

Worked example — freelancer who missed Q1

Avinash is a freelance architect. Net tax for FY 2024-25 = ₹1,00,000 (after ₹20K TDS from clients).

He missed the 15 June deadline (Q1 = ₹0 paid). He caught up from Q2:

QuarterRequired (cumulative)Paid (cumulative)ShortfallInterest
Q1 (15 Jun)₹15,000₹0₹15,0001% × ₹15K × 3 = ₹450
Q2 (15 Sep)₹45,000₹45,000₹0₹0
Q3 (15 Dec)₹75,000₹75,000₹0₹0
Q4 (15 Mar)₹1,00,000₹1,00,000₹0₹0
Total §234C₹450

Missing just Q1 costs ₹450 — a small but avoidable penalty.

Lump-sum Q4 scenario (common mistake)

If Avinash pays nothing until 15 March:

QuarterRequiredPaidShortfallInterest
Q1 (15 Jun)₹15,000₹0₹15,000₹450
Q2 (15 Sep)₹45,000₹0₹45,000₹1,350
Q3 (15 Dec)₹75,000₹0₹75,000₹2,250
Q4 (15 Mar)₹1,00,000₹1,00,000₹0₹0
Total §234C₹4,050

Paying everything in one lump sum in March still satisfies §234B (≥ 90% paid by 31 March), but the Q1–Q3 shortfalls still accumulate ₹4,050 in §234C interest.

Bridges

  • Income Tax Calculator — compute total tax liability before setting up the advance-tax schedule
  • TDS Calculator — §234A interest on late return filing (separate from §234C)
Related

Concepts and calculators referenced here.

Concepts

Other calculators

Frequently Asked Questions

Who must pay advance tax?
Any taxpayer whose estimated tax liability for the year **exceeds ₹10,000** (after TDS) must pay advance tax. This includes salaried employees with significant other income (capital gains, FD interest, rental income, freelance), self-employed professionals, and business owners. Employees whose entire tax is covered by employer TDS (Form 16) typically don't need to separately pay advance tax.
Are senior citizens exempt from advance tax?
**Yes** — senior citizens (≥ 60 years old) who do **not** have income from business or profession are exempt from paying advance tax under §207 of the IT Act. They can pay all their tax as self-assessment tax when filing the return without any §234C interest. However, §234A (late filing interest) and §234B (advance-tax shortfall below 90%) can still apply.
What are the advance tax due dates?
For individuals (non-business): Q1 by **15 June** (15% of net tax), Q2 by **15 September** (45% cumulative), Q3 by **15 December** (75% cumulative), Q4 by **15 March** (100% cumulative). Note: the percentages are *cumulative* — not incremental. If you pay nothing in Q1, Q2, and Q3 but pay everything by 15 March, you avoid §234B (which kicks in only if total advance tax is < 90% by 31 March) but face §234C for Q1, Q2, and Q3 shortfalls.
How do I pay advance tax (Challan 280)?
Pay via the income tax e-filing portal (incometax.gov.in) → Payments → e-Pay Tax → Tax Payment → **Challan 280** (Income Tax on Companies/Other). Select 'Advance Tax' (code 100) as the type of payment. Enter the assessment year (AY) carefully — it is the year after the FY (FY 2024-25 → AY 2025-26). Keep the challan/BSR number and payment date for your records.
What is the difference between §234B and §234C?
**§234B** applies if your *total* advance tax paid by 31 March is less than 90% of net tax. Interest runs from 1 April of the assessment year until payment. **§234C** applies to *quarterly shortfalls* regardless of whether you hit 90% by March. Both can apply simultaneously — §234C for the shortfalls in each quarter, §234B if the 31-March total is still below 90%. The [TDS calculator](/tax/tds-calculator/) covers §234A (late filing). §234B calculation is more complex and will be added in a future update.
Does the regime (old vs new) affect advance tax calculation?
**No.** Advance tax is computed on your *total tax liability* regardless of regime. You compute your likely tax under whichever regime you expect to file under, and pay accordingly. If you later switch regimes at filing time, you may end up having overpaid or underpaid — with §234C applying to underpayments in the regime you ultimately chose.
Compliance disclaimer

The tax calculations on this page are based on the Income Tax Act, 1961 provisions applicable for the financial year shown. Tax laws change; always verify current provisions and consult a Chartered Accountant for filing decisions. This is educational content, not tax advice.

About this calculator

Reviewed by Jayesh Jain, AMFI Registered Mutual Fund Distributor (ARN-286359 — verify ).

Last reviewed: 2026-05-05

Formula source: Income Tax Act, 1961: Section 234C