Advance tax due dates and interest under 234B and 234C, worked on four payment patterns

The short answer

Advance tax falls due in four instalments, under s.211 of the 1961 Act, s.408(1) of the Income-tax Act, 2025: 15 percent of the year's tax by 15 June, 45 percent by 15 September, 75 percent by 15 December and 100 percent by 15 March. Each figure is cumulative.

A shortfall attracts two charges, and they stack. Interest for deferment of an instalment, under s.234C, s.425(1) for tax year 2026-27, is 3 percent of the shortfall at each of the first three dates and 1 percent at 15 March. Interest for short payment, under s.234B, s.424 for tax year 2026-27, is 1 percent for every month or part of a month from 1 April on the whole shortfall, where less than 90 percent of the tax was paid by 31 March.

On ₹ 3,00,000 of tax after TDS and TCS, paying nothing costs ₹ 15,150 under s.234C and ₹ 12,000 under s.234B for a balance paid on 31 July, ₹ 27,150 in all. Paying all of it on 15 March still costs ₹ 12,150, more than the ₹ 7,500 of paying each instalment one date late.

The rule in plain words

The instalments are worked on the tax on estimated total income less the tax deductible or collectible at source, under s.209, s.405 for tax year 2026-27, and advance tax is payable only where that figure is ₹ 10,000 or more, under s.208, s.404. It is not payable by a resident aged 60 or more at any time in the year without business or professional income, under s.207(2), s.403(3). Interest runs on a wider base, under s.234C and s.234B, s.425(5) and s.424: it also takes off foreign tax relief and three other reliefs and credits, which every figure here leaves out.

Interest for deferment is worked date by date on the cumulative amount due less the cumulative amount paid by that date. Two rows carry a safe harbour, within s.234C itself and in s.425(2): no interest on the 15 June row where 12 percent or more of the tax due was paid by then, and none on 15 September at 36 percent or more. It is all or nothing on the row.

Interest for short payment runs from 1 April to the date the balance was paid as self assessment tax, part of a month counting whole: a return self assessed on 31 July is 4 months, an audit case settled on 31 October is 7.

The four instalments on ₹ 3,00,000, nothing paid

Tax on estimated total income of ₹ 3,60,000 less ₹ 60,000 of TDS and TCS leaves ₹ 3,00,000, and nothing is paid.

Safe harbour asks is the least cumulative payment by that date that spares the whole row; nothing similar reaches 15 December or 15 March.

Four payment patterns, FY 2025-26 under the 1961 Act

The same ₹ 3,00,000 paid four ways, any balance paid on 31 July 2026 so that s.234B runs for 4 months; the late pattern pays each instalment at the next date and the last ₹ 75,000 on 31 March.

The ₹ 75,000 paid on 31 March counts for s.234B, which sees ₹ 3,00,000 paid in the year, but not for the 15 March row, which closed on its due date, so s.234C still charges ₹ 750 there.

Conditions and edge cases a CA gets asked about

The commonest error is testing the safe harbour at the instalment's own percentage. Paying ₹ 36,000 by 15 June and ₹ 1,08,000 by 15 September, then the last two instalments in full, costs nil; a working that tests at 15 and 45 percent charges the same payments ₹ 1,080. Missing it charges the whole shortfall: in the half pattern ₹ 22,500 by 15 June is short of the ₹ 36,000 it asks, so the full ₹ 22,500 shortfall is charged, ₹ 675.

The 90 percent test is inclusive. ₹ 2,70,000 paid by 31 March on ₹ 3,00,000 passes and s.234B is nil; ₹ 2,69,999 fails, and the charge then runs on the whole ₹ 30,001 unpaid, rounded down to ₹ 30,000 under Rule 119A(c), as reported, now Rule 269(c), ₹ 1,200 for 4 months. With nothing paid, an audit case settled on 31 October carries ₹ 21,000 under s.234B instead of ₹ 12,000.

The presumptive single instalment, under s.211(1)(b), s.408(2) for tax year 2026-27, puts the whole advance tax on 15 March for assessees declaring under s.44AD(1) and s.44ADA(1), now s.58(2), Sl. No. 1 or 3. A shortfall is charged 1 percent once, under s.234C and s.425(3), with no safe harbour: ₹ 1,50,000 paid against ₹ 3,00,000 costs ₹ 1,500 there and ₹ 6,000 under s.234B, and the full amount costs nil. The goods carriage scheme, s.44AE as it was and Sl. No. 2 of the s.58(2) Table as it now is, is not named, so that assessee pays the four ordinary instalments and ₹ 3,00,000 paid wholly on 15 March costs ₹ 12,150.

Relief for income that could not be estimated, within s.234C and in s.425(4), has two limbs and both must be satisfied. The shortfall must be on account of underestimating or failing to estimate capital gains, casual income, income of a business or profession accruing for the first time, or dividend; and the tax on that income must have been paid in full in a remaining instalment, or by 31 March of the tax year. Where ₹ 1,00,000 of the ₹ 3,00,000 is tax on a capital gain that arose in February, every instalment was met on the other ₹ 2,00,000 and the tax on the gain was paid on 15 March, interest under s.234C is ₹ 4,050 without the relief and nil with it. A trader whose existing business simply beat the estimate does not satisfy the first limb.

Interest for short payment, under s.234B, measures against tax on the income as assessed, and interest for deferment, under s.234C, against tax on the income as returned, so where an assessment moves the income the s.234B working has to be redone. Every working here also assumes the balance was paid in one go: where it was paid in parts, or after determination, each slice runs for its own period, worked by hand.

What changes for tax year 2026-27 under the 2025 Act

The Income-tax Act, 2025 is in force from 1 April 2026, so it governs tax year 2026-27, and it replaces the previous year and the assessment year with a single tax year. FY 2025-26, being filed now, is still under the Income-tax Act, 1961. Every instalment from 15 June 2026 to 15 March 2027 belongs to tax year 2026-27.

The arithmetic does not move; the numbering does. Interest for short payment keeps one section, s.424, while s.234C splits into five sub-sections of s.425, from the charge in s.425(1) to the tax it runs on in s.425(5).

The section numbers under each Act

Each provision the working turns on, as the calculator names it for FY 2025-26 under the 1961 Act and tax year 2026-27 under the 2025 Act.

The instalments, the percentages, both safe harbour thresholds and both rates are the same under either Act, so every figure above holds for tax year 2026-27, with s.424 counting its months from 1 April 2027.

What the calculator does

The calculator beside this guide takes the tax on estimated total income, TDS and TCS, the running total paid by each due date, anything paid after 15 March and the months to the date you paid the balance, and works each instalment row, the safe harbour, the 90 percent test and both charges under either Act's numbering. It applies no slab, surcharge or cess. Its relief switch asserts the first limb for you, and its senior question takes the year out of advance tax.