Advance Tax Calculator FY 2026-27

Interest under section 234B (now section 424)

This is the interest for not paying enough advance tax, and it is the one people search for by name. It applies where you paid less than 90% of your assessed tax, or paid none at all.

The rate is 1% for every month or part of a month. “Part of a month” is literal: one day into a month is a whole month’s interest.

• From: 1 April following the tax year — not from the year end, and not from the last instalment date
• To: the date your total income is determined
• On: the shortfall between assessed tax and the advance tax you actually paid

Assessed tax is already net of TDS. That is s.424(2), and it is the most common error in a manual calculation — subtracting TDS a second time makes the shortfall look smaller than it is, or negative, and produces an interest figure of zero when interest is in fact due.

Worked example

Tax on total income ₹3,00,000, TDS ₹1,00,000, no advance tax paid, income determined on 31 July following the year:

• Assessed tax = ₹3,00,000 − ₹1,00,000 = ₹2,00,000
• Advance tax paid = ₹0, so the shortfall is the whole ₹2,00,000 (and it is below 90%, so the section applies)
• Period = 1 April to 31 July = 4 months
• Interest = ₹2,00,000 × 1% × 4 = ₹8,000

Interest under section 234C (now section 425)

This is the interest for paying late within the year — missing an instalment even if you settle in full by March. The rates are stated as totals, not per month:

The fourth instalment is 1%, not 3%. Applying three months to it overstates the interest threefold, and it is a common bug in spreadsheet calculations.

Two tolerances most calculators miss. Under s.425(2) there is no interest for the first instalment if you paid 12% or more by 15 June, or for the second if you paid 36% or more by 15 September — not the full 15% and 45%.

Section 425(4) also forgives shortfall arising from income you could not reasonably have estimated in advance — capital gains, lottery and game winnings, dividend, and business income arising for the first time — provided you pay the tax on it in a remaining instalment or by 31 March.

Interest under section 234A (now section 423)

This is interest for filing late: 1% per month from the due date to the date you actually file. It is a different charge from the two above and is not computed by this calculator, because it needs your filing date and the due date that applied to you. A total shown here does not include it.

Who is outside advance tax entirely

Under s.403(3) a resident individual aged 60 or more with no income from business or profession is not liable to advance tax at all — and therefore not liable to either interest charge. All three conditions must hold. This removes the liability rather than reducing it, which is why the calculator asks rather than assuming.