Advance Tax and Section 234B / 234C Interest, Explained

By the MyTaxLocker Team · Updated 11 June 2026

India follows a "pay-as-you-earn" system: if your tax for the year is large enough, you're expected to pay it in installments during the year, not all at filing time. Miss that, and interest under Sections 234B and 234C kicks in.

Who has to pay advance tax

If your total tax liability for the year, after subtracting TDS, is ₹10,000 or more, you're generally required to pay advance tax. Many salaried people never notice this because their employer's TDS already covers it — but income like interest, capital gains, rent, or freelance fees can push you over the line.

The quarterly due dates

Advance tax is paid in four installments across the financial year, on a cumulative basis:

• By 15 June — at least 15% of the year's tax
• By 15 September — at least 45% (cumulative)
• By 15 December — at least 75% (cumulative)
• By 15 March — 100%

234B — for not paying (or underpaying)

Section 234B charges interest when you've paid less than 90% of your assessed tax through advance tax and TDS by the end of the year. It runs at 1% per month on the shortfall, from April of the assessment year until you pay.

234C — for missing the installment schedule

Section 234C charges interest when you pay an installment late or short — even if you pay the full amount by 15 March. It's 1% per month on the shortfall for each installment during the deferral period.

234A — for filing late

Separately, Section 234A charges 1% per month on the unpaid tax if you file your return after the due date. So filing on time matters even after the tax itself is paid.