Section 234B Advance Tax Interest: Returning NRI Guide
Section 234B 1% monthly interest when advance tax falls below 90% — transition-year instalments for returnees.
The 60-second version
Section 234B charges 1% per month interest when advance tax paid is less than 90% of assessed tax — returning NRIs with salary plus foreign capital gains in transition year often trigger 234B without quarterly instalments.
234B runs from 1 April of AY — transition-year capital gains without advance tax instalments is the common trap
Section 234B applies when advance tax paid before 31 March is less than 90% of tax on returned income — returning NRIs who sell US RSU or UK property in transition year owe 234B if no instalments paid.
Interest is 1% per month on shortfall from 1 April until tax paid — overlaps with Section 234C deferment interest on instalment timing.
Advance tax lane: first-year advance tax guide for 15-Jun / 15-Sep / 15-Dec / 15-Mar schedule.
234B vs 234C
| Section | Trigger | Rate |
|---|---|---|
| 234B | Advance tax < 90% | 1%/month |
| 234C | Instalment deferment | 1% x 3 months |
| 234A | Late filing | 1%/month |
| 234F | Late filing fee | Flat fee |
Avoid 234B
Estimate tax
Transition year.
Pay 90%
By 31 March.
Instalments
15-Jun onward.
Challan 280
Advance tax type.
Reconcile
In ITR.
Flow
234B kit
- Tax estimate.
- Challan 280.
- Instalment dates.
- 234C calc.
- CA sign-off.
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RNOR foreign income
RNOR may exclude foreign income from India tax — advance tax on Indian-source portion only; still model RSU sale and India rent.
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vs 234C?
234B is overall shortfall below 90%; 234C is deferment on each quarterly instalment — both may apply.
Salary TDS?
Employer TDS counts toward advance tax — verify Form 26AS before paying extra instalments.
Capital gains?
Large one-time gain without instalments triggers 234B — pay advance tax when gain crystalizes.
RNOR?
RNOR with only foreign income may have nil India tax — 234B may not apply if assessed tax is nil.
Senior?
No age exemption from 234B — senior citizens still owe advance tax on taxable income above threshold.
234F overlap?
234F is late filing fee separate from 234B interest on advance tax shortfall.
Your tax year is already running.
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