Statutory Interest Calculator the rates Indian statutes prescribe, with the section quoted

Five interest rules that lawyers, accountants and small suppliers compute by hand and get wrong in the same ways: the MSMED Act's three-times-bank-rate compounded monthly, the six per cent ceiling on decrees under the Civil Procedure Code, the two-points-above-market rate on arbitral awards, the compensation limits on a bounced cheque, and the plain simple-or-compound sum underneath all of them. Each tab quotes the provision it applies and shows the month-by-month working.

Delayed payment to a micro or small enterprise

The bank rate is published by the RBI with every monetary policy statement; it has stood at the marginal standing facility rate since 2016. Enter the rate in force for the period.

Section 15, MSMED Act 2006"Where any supplier supplies any goods or renders any services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day: Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptance."
Section 16, MSMED Act 2006"Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer shall, notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at three times of the bank rate notified by the Reserve Bank."

"Appointed day" (section 2(b)) is the day following fifteen days from acceptance where nothing is agreed in writing. The interest is not deductible for the buyer's income tax (section 23), and the amount must be disclosed in the buyer's audited accounts (section 22). The supplier must be a registered micro or small enterprise for the provision to apply.

Interest on a money decree

Section 34(1), Code of Civil Procedure 1908"Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent. per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit: Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent. per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions."

Three periods, three rates: pre-suit interest is whatever the contract or a statute gives; pendente lite is at the court's discretion; post-decree is capped at six per cent unless the proviso applies. Interest under section 34 runs on the principal sum adjudged, not on interest, so all three are simple.

Interest on an arbitral award

"Current rate of interest" is defined by section 2(b) of the Interest Act 1978 as the highest of the maximum rates at which interest may be paid on different classes of deposits by scheduled banks. Enter the figure the award or the parties rely on.

Section 31(7), Arbitration and Conciliation Act 1996, as amended in 2015"(a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment. Explanation: The expression "current rate of interest" shall have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978."

Before 23 October 2015 clause (b) read eighteen per cent; awards made before that date carry the old rate. Whether post-award interest runs on the "sum directed to be paid" inclusive of pre-award interest has been litigated; this page computes it on the awarded sum plus pre-award interest, which is the reading in Hyder Consulting v Governor of Orissa (2015) 2 SCC 189, and shows the alternative below it.

Dishonoured cheque

Section 138, Negotiable Instruments Act 1881The drawer "shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both", provided the cheque was presented within its validity, a written demand was made within thirty days of the dishonour memo, and the drawer failed to pay within fifteen days of receiving it.
Section 143AThe court trying the offence may order interim compensation "which shall not exceed twenty per cent of the amount of the cheque", payable within sixty days. Section 148: on appeal against conviction, the appellate court may order deposit of "a minimum of twenty per cent of the fine or compensation awarded by the trial court".

Compensation is ordered under section 357 of the Criminal Procedure Code (now section 395 of the BNSS) out of the fine, and the Supreme Court has directed that it be computed with the loss of interest in mind; the rate is in the court's discretion, so the figure below is an upper envelope and a common working rather than an entitlement.

Simple or compound interest

Day count is actual days over 365 for simple interest; compounding applies the periodic rate for each complete period and simple interest for the stub. Both conventions are stated in the working so a court or a counterparty can check them.