Interest payable for deferment of Advance tax installments (Section 234C) – myITreturn Help Center

The taxpayer is required to pay Advance tax in the current Financial year if his Advance tax liability is Rs. 10,000/- or more. Income-tax department has provided quarterly due dates for payment of advance tax in case of individual taxpayers.

Interest under section 234C is payable for deferment of installments of advance tax.

Click here to know about the due dates for payment installments of Advance tax (F.Y. 2021-22).

Interest u/s 234C is payable as follows:

for all taxpayers (excluding who have opted for Presumptive Taxation Scheme)

Particulars	Rate of Interest	Period of Interest	Amount on which Interest is calculated
If Advance Tax paid on or before June 15 is less than 12% of the Amount*	Simple interest @1% per month or part of month	3 months	15% of Amount* less tax already deposited before June 15
If Advance Tax paid on or before September 15 is less than 36% of the Amount*	Simple interest @1% per month or part of month	3 months	45% of Amount* less tax already deposited before September 15
If Advance Tax paid on or before December 15 is less than 75% of the Amount*	Simple interest @1% per month or part of month	3 months	75% of Amount* less tax already deposited before December 15
If Advance Tax paid on or before March 15 is less than 100% of the Amount*	Simple interest @1% per month or part of month	1 month	100% of Amount* less tax already deposited before March 15

*Amount = Tax on total income less TDS less relief u/s 90/ 91A/91(i.e relief under DTAA) less tax credit u/s 115JAA or 115JD (i.e MAT/AMT credit respectively)

for taxpayers who have opted for Presumptive Taxation Scheme under section 44AD & 44ADA – Business and Professionals

Particulars	Rate of Interest	Period of Interest	Amount on which Interest is calculated
If Advance Tax paid on or before March 15 is less than 100% of the Amount*	Simple interest @1% per month	1 month	100% of Amount* less tax already deposited before March 15

*Amount = Tax on total income less TDS less relief u/s 90 or 91 less tax credit u/s 115JD (i.e AMT credit)

Other key points for Interest U/s. 234C:-

This interest is not applicable if up to 12% Advance tax has been paid in 1st installment and up to 36% in 2nd instalment.
This interest is compulsory. Hence it cannot be reduced or waived by any Income-tax authority.
This interest is not applicable if the shortfall in payment of Advance tax in any installment is due to under-estimation or failure to estimate any of the following incomes:
- Capital gain amount
- Income from winning from lotteries, crossword puzzle, racehorses etc.
- Income from a new business
- Dividend income from a domestic company
Advance tax can be paid after receipt of the above-mentioned income before the due date of the next installment.
If no installment is due(income received between15th March to 31st March) the advance tax should be paid upto 31st March.

Click here to know about Interest payable U/s. 234A.

Click here to know about Interest payable U/s. 234B.

Interest u/s 234C is payable as follows:

Other key points for Interest U/s. 234C:-

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