Clarification on Interest u/s 234c being charged

If you have paid entire tax through tds,which is more than your tax liability , 234 c interest should not be applicable.

I am surprised at it

Interest under Section 234C is charged at a simple rate of 1% per month or part of a month on the shortfall amount of advance tax for each installment.

• For the first three installments (June 15, September 15, December 15): If there's a shortfall, interest is calculated for a period of three months on the unpaid amount.

• For the last installment (March 15): If there's a shortfall, interest is calculated for a period of one month on the unpaid amount.

Section 234C: Deals with interest for deferment or short payment of advance tax installments during the financial year.

I am facing the same issue, even though my employer has remitted the TDS on time and I have paid the advance tax within the due dates for each quarter. In fact, the advance tax paid for income from other sources exceeds the tax liability computed for each respective quarter. When I use the tax calculator (without logging in) on the Income Tax website, it correctly shows that there is no penalty under section 234C. This appears to be a glitch in the portal after logging in, and I have therefore raised a grievance through the portal.

Hi team, is this issue resolved? Facing same concern while filing ITR online

Section 234C interest applies at 1% per month on the SHORTFALL in advance tax for each installment quarter. Here is how Q1 (June 15) works:

• Minimum required: 15% of your total estimated annual tax liability
• If TDS deducted by your employer covers 100% of your tax, no advance tax is separately needed
• If you have any OTHER income (interest on FD, rent, capital gains, freelance) beyond salary, TDS on salary alone may not be enough
• Common trap: Bank deducts TDS at 10% on FD interest, but if your slab rate is 30%, the gap becomes your advance tax shortfall

Section 234C EXCEPTION: Capital gains income (equity/MF sold) is excluded from advance tax calculation until the actual gain is booked. So if your Q1 shortfall was purely due to LTCG from equity redemption, Section 234C does NOT apply for that portion.

For Q1 FY 2026-27: If you missed the June 15 deadline or paid less than 15% of estimated tax, 234C interest at 1% per month accrues for 3 months on the shortfall. Pay the balance as advance tax in Q2 (by September 15) to stop the interest clock.