Section 234A / 234B / 234C · Interest for default in payment of tax
Three flavours of interest — for late filing, late payment, and deferred advance tax.
- Rate
- 1% per month (or part)
- 234A
- Late filing of return
- 234B
- Shortfall ≥ 90% in advance tax
- 234C
- Default in quarterly instalments
In plain English
If you delay filing (234A), don't pay enough advance tax (234B) or pay it in the wrong quarterly instalment (234C), the law charges interest. Each runs at 1% per month and they can stack up — so paying advance tax on time genuinely saves money.
| Meaning | Number |
|---|---|
| Rate | 1% per month (or part) |
| 234B | Shortfall ≥ 90% in advance tax |
How the three sections fit together
- 234A — Late filing — 1%/month on unpaid tax, from due date to date of filing
- 234B — Advance tax shortfall — 1%/month from 1 April of AY, if advance tax < 90% of assessed tax
- 234C — Quarterly default — 1%/month on shortfall vs 15%/45%/75%/100% instalment schedule
- Senior citizens without business income — Exempt from advance tax — no 234B/234C
What this section covers
Section 234A charges simple interest at 1% per month (or part) on unpaid tax from the day after the due date u/s 139(1) until the return is actually filed. Section 234B charges 1% per month from 1 April of the AY where advance tax paid is less than 90% of assessed tax, until the date of payment. Section 234C charges 1% per month for shortfall in any of the four quarterly instalments of advance tax (15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March). Resident senior citizens with no business income are exempt from advance tax and therefore from 234B/234C. Interest under 234A is on TAX (after TDS), not on income.
Read the legal text
“Where the return of income for any assessment year… is furnished after the due date… the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date…”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 234A / 234B / 234C | 423 / 424 / 425 |
| Topic | Interest for default in payment of tax | |
| Verdict | Renumbered — rate and mechanics retained | |
| Notes | Mapped to Sections 423 (234A), 424 (234B) and 425 (234C) of the Income-tax Act, 2025, as amended by Finance Act 2026. Related: 234D → 426, 234E → 427, 234F → 428(a). Rates and mechanics: detailed review pending. | |
Common confusion
234B and 234C are different — 234C is for missing each quarterly instalment; 234B kicks in only at year-end if total advance tax is less than 90% of assessed tax. Paying everything on 31 March still attracts 234C for earlier quarters.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.
What was checked
234A → 423: Mapping only. 234B → 424: Mapping only. 234C → 425: Mapping only. Income-tax Act, 2025 as amended by Finance Act, 2026 (consolidated PDF)