Compute the exact compound interest your buyer owes under Section 16 of the MSMED Act 2006 – month-by-month, at the correct RBI bank rate for each period, with part payments handled.
Most online calculators still use an outdated single rate (19.5% or 20.25%). The RBI bank rate has changed five times since February 2023 – this calculator applies the rate actually in force in each month of the delay, the method courts require, and produces a ledger you can annex to an MSEFC / Samadhaan claim or use for Clause 22 tax-audit reporting.
Current rate: 16.50% p.a. (3 x bank rate 5.50%)Delayed Payment Interest Calculator (MSMED Act, Section 16)
Usually today, or the date of your claim/demand notice.
Section 16 (3x) protects micro and small suppliers with Udyam registration before the supply.
Courts have upheld month-wise variable rates; fixed is shown for comparison.
Used for the Section 22 / Form 3CD Clause 22 working figures.
Invoices
RBI Bank Rate History for MSMED Interest (the rate table this calculator uses)
Section 16 interest = three times the bank rate notified by the Reserve Bank of India, compounded with monthly rests. The bank rate tracks the Marginal Standing Facility (MSF) rate. Source: RBI / DICGC bank-rate register. Last verified: 8 July 2026 (next RBI MPC review: August 2026).
| Effective from | Bank rate | 3x rate (micro/small) |
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How the calculation works
1. Due date: if there is a written agreement, payment is due within the agreed credit period – capped at 45 days from the day of acceptance by section 15 of the MSMED Act. If there is no written agreement, payment is due before the appointed day – the day following the expiry of 15 days from acceptance. Goods or services are deemed accepted if the buyer raises no written objection within 15 days of delivery; if an objection was raised and resolved, acceptance shifts to the date the objection was removed.
2. Interest: from the day interest starts, the outstanding amount earns compound interest with monthly rests at three times the RBI bank rate (section 16). This calculator accrues interest day-wise within each calendar month at the rate in force on those days (365-day basis), adds the month’s interest to the balance at the month end, and carries on. Part payments are appropriated first against accrued interest, then principal, on the date received.
3. Not deductible: remember – this interest is specifically disallowed as a business deduction for the buyer under section 23 of the MSMED Act, and the principal itself can attract disallowance under section 43B(h) of the Income-tax Act 1961 if paid beyond the section 15 time limit.
Buyer not paying even after the notice?
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