Missed Advance Tax? Sections 234B & 234C Cost You
The Supreme Court confirmed that interest under Sections 234B and 234C of the Income Tax Act is mandatory if you underpay advance tax — but a CBDT waiver route exists. Here's what every Indian taxpayer must know to avoid surprise interest bills.
The interest under 234B alone on a ₹5L tax liability can exceed your monthly grocery bill — and most salaried Indians don't realise they owe it.
You could owe this on your taxes even if you paid everything on time
Key Takeaways
Calculate your advance tax liability now using your total estimated income for FY2025-26 — pay at least 90% by March 31 to avoid Section 234B interest.
Check all four quarterly deadlines (June 15, September 15, December 15, March 15) and verify your advance tax payments match the required percentages for each quarter.
If you already have a 234B or 234C demand in an old assessment, consult a CA about filing a formal CBDT waiver application — do not assume the officer will waive it automatically.
The Supreme Court confirmed that interest under Sections 234B and 234C of the Income Tax Act is mandatory if you underpay advance tax — but a CBDT waiver route exists. Here's what every Indian taxpayer must know to avoid surprise interest bills.
Here's what happened: The Supreme Court ruled that interest under Sections 234B and 234C of the Income Tax Act is mandatory and not subject to an assessing officer's discretion.. The court also confirmed that a formal waiver of this interest is possible, but only through the CBDT's circular dated 23 May 1996 — not as a default relief.. The case was sent back to examine whether the taxpayer qualifies for a waiver under that CBDT circular, meaning the waiver route is narrow but legally valid..
What you should do: Calculate your advance tax liability now using your total estimated income for FY2025-26 — pay at least 90% by March 31 to avoid Section 234B interest.. Check all four quarterly deadlines (June 15, September 15, December 15, March 15) and verify your advance tax payments match the required percentages for each quarter.. If you already have a 234B or 234C demand in an old assessment, consult a CA about filing a formal CBDT waiver application — do not assume the officer will waive it automatically..
Salaried employees with only salary income usually avoid 234B and 234C because TDS covers them — but if you earned extra income from freelancing, rent, or mutual fund redemptions this year, you likely owe advance tax too.
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- [1]“Income Tax | Interest Under Sections 234B and 234C Mandatory but Waiver Possible: Supreme Court” taxguruin · 14 Oct 2026
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