Why birth time matters so much
Birth time accuracy matters most for the Lagna and the house positions, because the Lagna changes about every two hours.
What it is
A four-minute error moves the Lagna by about one degree. A planet within that distance of a sign boundary can change its sign, and the house of every planet can change if the Lagna sign changes.
How it is worked out or read
If you have a birth certificate or hospital record, use that time. If you only have an approximate time, the chart is approximate, and the house-based results should be read with that in mind. The rectification topic explains how practitioners narrow it down.
Where it appears on this site
The birth chart and the chart checks both depend on the time. The how to get a birth time article has the steps.
Acting on an uncertain time
When the birth time is uncertain, the honest course is to say so, and to read the chart as a range rather than a point. Compare the results at the earliest and latest possible times, and note which conclusions remain the same. Where a conclusion depends on the exact Lagna or on a planet near a boundary, present it as uncertain, and avoid building a firm reading on it.
How much error is acceptable
There is no single answer, because the answer depends on the question. If you only want the Sun sign and the Moon sign, a time error of an hour may change nothing, unless the Moon is near a boundary. If you want the Lagna, a few minutes can matter, because the Lagna moves roughly one degree every four minutes. A reader should state the uncertainty of the time and then check which conclusions survive that range. The honest way to work is to test the chart at the earliest and latest times the record allows, and to note which results stay the same.
A simple test with the tools
Enter the birth details with a time five minutes earlier and then five minutes later, and compare the Lagna, the house of each graha and the nakshatra of the Moon. If nothing changes, the chart is stable across that range and the result can be stated with confidence. If the Lagna changes, the reading that depends on the house of a planet near the cusp should be marked as uncertain. This test costs little and prevents the most common overconfidence in chart reading.
What to write down
When you record a birth time for a chart, write down its source, its precision and the time zone used. A time from a hospital record that is exact to the minute is different from a time recalled by a parent a year later. The source note matters later, when you compare results or when someone else reads the chart. A chart with a clear note about its time is more useful than one that claims a precision the data does not have.