The four instalments for FY 2026-27, plus section 234B and 234C interest computed instalment by instalment — including the 12% and 36% tolerance triggers and the Rule 119A rounding that most calculators leave out.
The percentages are cumulative, so a shortfall in June is still outstanding in September unless you make it up.
| Due by | Required | Paid by then | Shortfall | Months | Interest |
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Anyone whose tax for the year, after subtracting TDS and TCS, comes to ₹10,000 or more — section 208. Below that, nothing is payable and no interest can arise. There is one clean exemption: a resident aged 60 or above with no business or professional income is outside advance tax altogether under section 207, so a retired person living on interest and pension never owes 234B or 234C however badly the year is estimated. A senior citizen who runs a consultancy does not get that relief.
Salaried employees usually fall outside advance tax by accident rather than design, because TDS on salary covers the liability. What pulls them back in is income the employer cannot see: rental income, interest above the TDS threshold, capital gains, or freelance work on the side.
This is the most common misreading. The four dates carry 15%, 45%, 75% and 100% — cumulative totals of the year's advance tax, not four separate quarters of 25% each. A shortfall in June is therefore still a shortfall in September unless you make it up, and it is charged again. Miss the first instalment entirely and pay only the scheduled amounts thereafter, and you carry that gap through every remaining instalment, paying interest on it four times over.
Presumptive filers under section 44AD or 44ADA are treated differently and much more leniently: they may pay the whole amount in a single instalment by 15 March, with interest arising only if that payment falls short of 100%.
Section 234C attaches a tolerance to the first two instalments, and almost every calculator that mentions it gets the arithmetic wrong. Pay at least 12% of your advance tax by 15 June and no interest arises at all, even though the schedule asks for 15%. The same holds at 36% against September's 45%.
But the relief is all-or-nothing. Fall a single rupee below the trigger and interest is charged on the shortfall from 15%, not from 12%. On a ₹4,00,000 liability, paying ₹48,000 by 15 June costs nothing; paying ₹47,900 attracts interest on ₹12,100 — the gap to 15%, not the ₹100 you missed the trigger by. That cliff edge is worth knowing about in the days before a due date, because a small top-up either side of it changes the answer completely. The December and March instalments have no tolerance band at all.
234C penalises the timing. It looks at each instalment in turn and charges 1% a month on what was deferred — three months for the first three instalments, one month for the last, since the year ends shortly after.
234B penalises the total. It applies where advance tax paid across the whole year came to less than 90% of assessed tax, and runs at 1% a month from 1 April of the assessment year until the balance is actually paid, on the entire shortfall rather than an instalment slice. The 90% test is a genuine safe harbour: pay 90% and 234B disappears completely, even though you still owe the remaining 10%.
The two are cumulative. A year of deferred instalments followed by a payment at filing time attracts both, which is why the interest on a neglected advance tax liability compounds into real money faster than people expect.
Interest is not computed on the shortfall as it stands. Rule 119A requires the amount to be rounded down to the nearest multiple of ₹100, with any fraction ignored. A shortfall of ₹6,199 becomes ₹6,100. A shortfall of ₹99 becomes nothing at all. On a large shortfall this barely registers; on a marginal one it is the whole answer, and it is the sort of thing that makes a hand calculation disagree with the department's computation by a few rupees for no obvious reason.
The proviso to section 234C recognises that some income genuinely cannot be forecast. Shortfall attributable to capital gains, winnings from lotteries and similar sources, dividend income, and income from a business or profession accruing for the first time escapes 234C — on the condition that the tax on it is paid in the remaining instalments, or by 31 March where the income arises after the last instalment date.
Two limits are worth stating plainly. The relief is from 234C only: section 234B still applies to the total, so an unexpected capital gain left unpaid until filing still attracts interest, just under the other section. And it covers income you could not have anticipated, not income you chose not to estimate — a rental yield you have received every year is not an unforeseeable event.
Nothing immediate. There is no notice, no separate penalty, and no consequence you will notice until you file. That is precisely why advance tax gets neglected: the cost is invisible until the return is prepared, by which point 234B has been accruing since 1 April. Paying late remains far better than not paying — interest runs per month or part of a month, so a payment on 20 September costs a full extra month against one on 14 September, and the same logic makes paying on the 14th meaningfully cheaper than the 16th.
Worked example: Tax of ₹5,00,000 with ₹1,00,000 of TDS leaves an advance tax liability of ₹4,00,000. Paying ₹40,000, ₹60,000, ₹80,000 and ₹1,00,000 across the four dates means cumulative payments of ₹40,000 / ₹1,00,000 / ₹1,80,000 / ₹2,80,000 against requirements of ₹60,000 / ₹1,80,000 / ₹3,00,000 / ₹4,00,000. The shortfalls of ₹20,000, ₹80,000 and ₹1,20,000 each run three months, and the final ₹1,20,000 runs one — giving 234C of ₹600 + ₹2,400 + ₹3,600 + ₹1,200 = ₹7,800. Because ₹2,80,000 is below 90% of ₹4,00,000, section 234B adds 1% a month on ₹1,20,000: ₹4,800 over four months. Total interest ₹12,600 on a ₹1,20,000 underpayment.
The 15 September instalment carries a cliff worth 0.27% of your liability — why being ₹100 short costs ₹1,083 explains where the edge sits and how to stay the right side of it. You need a tax figure before any of this works — get it from the Old vs New Regime Calculator, which settles the regime question at the same time, or read where the crossover falls in the crossover study. Freelancers on 44ADA get the single-instalment treatment described above; the Freelancer Tax Calculator covers the rest of that regime. Advance tax obligations depend on being taxed in India at all, which the Residential Status Calculator settles, and the return this all lands on is chosen by the ITR Form Selector. Filing dates and what late filing costs are in the split ITR deadlines for AY 2026-27. India-specific money rules are worked through end to end in our book, Paisa Playbook.