Learn all about penalties imposed on failure of paying advance income tax under sections 234A, 234B, and 234C.
Shriya Mishra | Jun 23, 2025 |
FAQs on Interest Under Sections 234A, 234B, 234C
The sections 234A, 234B, and 234C of the Income Tax Act are taken into account when a penalty needs to be imposed for delayed tax compliance. All these sections are applied in different circumstances:
Section 234A: This section is applied in cases where income tax returns are either filed late or aren’t filed at all. The interest charged under this section stands at 1% per month starting from the due date till the return is filed.
Section 234B: Applied in scenarios where advance tax payments are less than 90% of the assessed tax. This also comes with the charge of 1% monthly interest.
Section 234C: Imposed when the advance tax instalments fall short of the required percentage. The interest rates vary based on the amount paid and the due dates.
For corporate and non-corporate assessees:
| Due date of instalment | Amount on which interest is payable | Rate of Interest | Period of interest |
| On or before June 15 | 15%* | 1% per month | 3 months |
| On or before September 15 | 45%* | 1% per month | 3 months |
| On or before Dec 15 | 75%* | 1% per month | 3 months |
| On or before March 15 | 100%* | 1% per month | 1 month |
For assessees opting for sections 44AD or 44ADA:
| Due date of instalment | Amount on which interest is payable | Rate of Interest | Period of interest |
| On or before March 15 | 100%* | 1% per month | 1 month |
| On or before March 15 | 100%* | 1% per month | 1 month |
A failure in paying advance tax on or before the designated deadline attracts interest under Sections 234B and 234C of the Income Tax Act.
Failure to pay an advance tax or 90% of total tax by 31st March will attract an interest charge of 1% per month.
| Particulars | Rate of Interest | Period of Interest | Amount on which interest is calculated |
| If Advance Tax paid by 15th June is less than 15% | 1% per month | 3 months | 15% of Amount* (-) tax paid before June 15 |
| If Advance Tax paid by 15th September is less than 45% | 1% per month | 3 months | 45% of Amount* (-) tax paid before September 15 |
| If Advance Tax paid by 15th December is less than 75% | 1% per month | 3 months | 75% of Amount* (-) tax paid before December 15 |
| If Advance Tax paid by 15th March is less than 100% | 1% per month | 1 month | 100% of Amount* (-) tax paid before March 15 |
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