Late Fee and InterestInterest for paying advance tax late or short
Section 425 of the Income-tax Act, 2025 charges interest when an instalment of advance tax is short: 3% of the shortfall for each of the first three instalments and 1% for the last. Enter the tax due on your return and what you had paid by each date.
The instalments
| Date | Paid in total at least | Interest on the shortfall |
|---|---|---|
| 15 June | 15% | 3% |
| 15 September | 45% | 3% |
| 15 December | 75% | 3% |
| 15 March | 100% | 1% |
Example
Tax due on the returned income is ₹2,00,000. Paid by 15 June: ₹10,000; by 15 September: ₹50,000; by 15 December: ₹1,00,000; by 15 March: ₹1,90,000. The 15 June shortfall is ₹30,000 − ₹10,000 = ₹20,000 at 3% = ₹600; 15 September: ₹90,000 − ₹50,000 = ₹40,000 at 3% = ₹1,200; 15 December: ₹1,50,000 − ₹1,00,000 = ₹50,000 at 3% = ₹1,500; 15 March: ₹2,00,000 − ₹1,90,000 = ₹10,000 at 1% = ₹100. Total ₹3,400.
What the calculator leaves out
The Act gives special treatment (section 425(3) and (4)): persons who declare profits under the presumptive provisions pay one instalment by 15 March with 1% interest, and no interest is charged for a shortfall caused by underestimating capital gains, dividends and some other income if the tax is paid in the remaining instalments. The calculator does not handle those cases.
Common questions
What are the advance tax instalments?
Under section 425 the cumulative advance tax due is 15% of the tax on the returned income by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March.
What interest is charged on a shortfall?
3% of the shortfall for the instalments of 15 June, 15 September and 15 December and 1% for 15 March.
When is there no interest?
Section 425(2): none if at least 12% was paid by 15 June and 36% by 15 September.
Sources
- The Income-tax Act, 2025 (Act No. 30 of 2025), as published in the Gazette of India, Extraordinary (egazette.gov.in), read from the PDF on 13 November 2026. Sections used: 263(1)(c) (due dates), 398(3)(a) (late TDS and TCS interest), 423 (late return interest), 424 (advance tax default), 425 (advance tax deferment), 426 (excess refund), 427 (late statement fee), 428 (late return fee).
- Commencement and the repeal of the 1961 Act: section 1(3) (in force on 1 April 2026) and section 536 of the same Act, and the CBDT's "FAQs on Interplay and Transition to the Income-tax Act, 2025" (incometaxindia.gov.in), questions 1.12, 3.5 and 6.1, read on 13 November 2026.
- Counting months: sections 398(3)(a) and 424 say "every month or part of a month", and the CBDT's FAQs (Q on interest for defaults in deducting or depositing TDS and for advance tax, read 13 November 2026) say "per month or part thereof". The Act itself leaves "the rounding off of periods when a fraction of a month is involved" to the rules it empowers the Government to make (the list of rule-making powers, clause (u)); those Income-tax Rules were not read. This site therefore counts every started month, measured from the starting date (28 June to 2 July is one month; 10 January to 12 February is two), which matches "month or part thereof" but the rules may fix the starting-date convention differently. Section 423 itself says only "number of months comprised in the period", so its calculator also shows the whole-month count.
Rates and fees read on 13 November 2026 from the Income-tax Act, 2025 as published in the Gazette. Rules can be amended, and the portal or your assessing officer computes the final amount. This site does the arithmetic and is not tax advice; it is not connected with the Income Tax Department.