Calculate interest charges on late income tax payments (234A, 234B, 234C) or late invoice payments. Enter the overdue amount, days late, and applicable rate.
Section 234B imposes 1% interest per month (or part thereof) if advance tax paid is less than 90% of the assessed tax. It is calculated from 1 April of the assessment year until the date of assessment or actual payment.
Simple interest = Principal × Rate × Days / 365. For ₹1,00,000 overdue at 18% per annum for 30 days: 1,00,000 × 18% × 30/365 = ₹1,479. Many contracts specify 18-24% p.a. for late payments.
Section 234C applies when advance tax instalments are not paid on time during the year. It charges 1% per month for shortfall in each quarterly instalment (June, September, December, March deadlines).
Yes. You can charge interest if specified in your invoice, contract, or agreement. The Interest on Delayed Payment to Micro and Small Enterprises (MSME) Act mandates payment within 45 days and allows 3× RBI rate interest on delays.
Under the MSME Development Act, buyers must pay MSMEs within 45 days. If not, they owe compound interest at 3× the RBI bank rate on the overdue amount. The buyer cannot deduct this interest as a business expense.
Commercial contracts in India typically specify 18-24% per annum for late payments. The legal maximum for unregistered money lending varies by state. For personal loans between individuals, courts have allowed up to 18% p.a.
For individuals: pay 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15 of the tax year. Calculate based on estimated annual income. Senior citizens (non-business) are exempt from advance tax.