Filing & Compliance · Section 205 · Tax Year 2026-2027

Default Surcharge Calculator

Calculate the surcharge on tax paid after its due date — based on the outstanding amount, the number of days overdue, and the applicable annual rate.

Statutory: higher of 12% or KIBOR + 3% per annum (Section 205). 12% is the floor; raise it if KIBOR + 3% is more.

Step by step

How default surcharge is worked out

  1. Enter the unpaid tax

    The amount that remained outstanding after the due date.

  2. Set both dates

    Your original due date and the date you actually pay (or are checking against).

  3. Confirm the rate

    Higher of 12% or KIBOR + 3% per annum — enter KIBOR + 3% for the period if that is above 12%.

  4. See your surcharge

    Calculated daily on the outstanding amount.

Reading the result

Surcharge is compensation, not a fine

A penalty punishes conduct and can be argued down. Default surcharge does neither — it compensates the exchequer for money it should have had earlier, so it accrues automatically from the day the tax fell due. There is no discretion to waive it for a good reason, and it does not wait for anyone to issue a notice.

Paying part of it still helps

The surcharge accrues on the amount still outstanding, so the daily cost falls the moment the principal does. On Rs 500,000 outstanding at a 12% annual rate that is roughly Rs 164 a day. Pay half and the accrual halves with it.

People often wait until they can clear the whole liability. Arithmetically that is the expensive choice: every day the full amount sits unpaid costs more than the same day with half of it cleared.

It can run alongside a late-filing penalty

These are two separate charges for two separate failures. Default surcharge is for paying late. The Section 182 penalty is for filing late. File on time but pay late and you owe surcharge only; miss both and you owe both.

The late filing penalty calculator covers the other one.

Where this stops

The rate is entered rather than fixed because it is prescribed by statute and has been revised. Use the rate that applied over your period of default — if the rate changed partway through, the calculation has to be split, which this single-period tool does not do.

FAQs

Default surcharge FAQs

What is default surcharge?

Section 205 charges default surcharge on tax, penalty or any other amount unpaid after its due date, computed for the period from the due date to the date of payment at "twelve percent or KIBOR plus three percent per annum, whichever is higher".

What rate should I use?

The statutory rate is the higher of 12% per annum and KIBOR + 3%. When KIBOR is below 9% the 12% floor applies; when it is above 9%, use the prevailing KIBOR plus 3 points for the period of default.

How are the days counted?

From the day after your original due date to the day you actually pay (or the date you're checking against) — enter both dates and the calculator counts the days between them.

Does paying late affect anything besides surcharge?

Persistent non-payment can also trigger recovery proceedings and other consequences beyond surcharge — pay outstanding tax as soon as possible to limit the cost.

Related tools

Also filed your return late?

Late filing penalty is separate from surcharge on unpaid tax.

Open Late Filing Penalty Calculator