Charging Interest u/s 234B and 234C in your ITR

While checking the acknowledgement of your ITR filed, you might have sometime witnessed interest u/s 234B and 234C. Looking at it you are left confused and find hard to interpret the reason of such levy. We help you grasp all about, why such amount is charged in your income tax return.

What is 234B and 234C?

234B and 234C are interest sections which relate to payment of advance taxes.


What is advance tax?

Any taxpayer having total taxes due in a year exceeding Rs.10,000/- is required to pay such amount in installments to the income tax department. Such payment of installments is known as payment of advance tax.


When is advance tax required to be paid?

The time limit for payment of advance tax for individual and corporate taxpayers (except those opting for presumptive taxation u/s 44AD) is

Due Date

Advance Tax payable

On or before 15th June

15% of estimated Advance Tax

On or before 15th September

45% of estimated Advance Tax

On or before 15th December

75% of estimated Advance Tax

On or before 15th March

100% of estimated Advance Tax


When interest under section 234B and 234C is charged?

Interest under section 234B and 234C is charged on happening of following events

  • 234B – Non payment or short payment of advance tax i.e. paying less than 90% of tax in advance
    Interest @ 1% per month or part of month is levied from 1st April following financial year till the date of actual payment of tax.
  • 234C –  Non payment or short payment of individual installments of advance tax.
    Interest @ 1% per month or part of month is levied

Who is required to pay advance tax?

Any person having total tax payable in a year exceeding Rs. 10,000/- is liable to pay tax in advance. The advance tax shall be paid as per the installments prescribed by the income tax department, which have been quoted above.The payer of advance tax can be anyone like a salaried person, a professional, person carrying his own business, or someone having income from other sources.

Click here to know more about interest under section 234A, 234B or 234C

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Abhishek Soni

By Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

2 comments

  1. Hi,

    I have doubt that do we need to pay both 234b and 234c penalty or any one section (which has higher amount) is enough?
    In my ITR excel utility, I could see both sections 234b & 234c are showing. Do I need to pay both?

    Thanks,
    Natarajan

    1. Hi Natarajan S,

      Thanks for writing to us. We appreciate your query.

      As per Income Tax Act, interest u/s 234B is levied on non payment or short payment of advance tax i.e. if advance tax is paid less than 90% of the assessed tax. Whereas interest u/s 234C is levied on non payment or short payment of individual instalments of advance tax. Therefore, if you have paid advance tax less than 90% and made short payment of individual instalment both then you are liable to pay interest under both the sections i.e. 234B and 234C. However, in one case you are liable to pay interest u/s 234C alone i.e. if advance tax paid is more than 90% of the taxes due.

      Hence, in your case, if you falling under the conditions of both the sections then you are liable to pay interest under both – 234B and 234C simultaneously. For customized opinion and safe tax planning, you can connect with us at [email protected] or at +09660996655.

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