MSME Delayed Payment Interest Calculator

About the MSME Delayed Payment Interest Calculator

A buyer must pay a micro or small enterprise on the date agreed in writing — never more than 45 days after accepting the goods or services — or, with no written agreement, within 15 days. If it pays late, the MSMED Act, 2006 makes it pay compound interest with monthly rests at three times the RBI Bank Rate from the day after payment fell due, whatever the contract says (ss.15, 16). With the Bank Rate at 5.50%, that is 16.50% a year, compounded every month.

Add your invoices, delivery dates and the payments you received. The calculator works out each due date, the interest month by month — applying every Bank Rate change since June 2015 — and the total claim, then writes a statement you can download as a spreadsheet and a demand letter to send the buyer. It also checks the things that sink claims before the Facilitation Council: registration dates, trading units, overseas buyers and old invoices. Nothing you enter leaves your browser.

Common uses

• A micro or small manufacturer or service provider chasing a buyer that pays after 45 days.
• Preparing the interest statement for an application on MSME Samadhaan or to the MSEFC.
• A buyer’s accounts team checking the interest it owes and must disclose under s.22.
• A chartered accountant reviewing overdue MSME dues at year end.

How the due date and the interest are worked out

• Acceptance is the day the goods were delivered or the service rendered; if the buyer objected in writing within 15 days, it is the day you removed the objection (s.2(b)).
• Due date: the date agreed in writing, but not more than 45 days from acceptance; with no written agreement, 15 days from acceptance (s.15). Interest starts the next day (s.16).
• Rate: three times the Bank Rate notified by the RBI. By default each Bank Rate change applies from its date; you can instead use the rate in force when interest started, or one rate of your choice.
• Monthly rests: each month counted from the day interest starts earns (3 × Bank Rate) ÷ 12 on the balance, and that interest is added to the balance at the end of the month — the method the MSME Samadhaan FAQ (Q.23) describes. A part of a month earns the monthly rate × days ÷ days in that month.
• Payments go to the invoice they were made against (or to the oldest invoice first, as the Indian Contract Act s.61 provides when neither side chose), first to the invoice amount and then to the interest — or interest first, if you prefer. Interest stops when an invoice is paid in full, unless you choose to keep charging interest on the unpaid interest.

Bank Rate history built in (Bank Rate → interest rate)

2 Jun 2015: 8.25% → 24.75% · 29 Sep 2015: 7.75% → 23.25% · 5 Apr 2016: 7.00% → 21.00% · 4 Oct 2016: 6.75% → 20.25% · 6 Apr 2017: 6.50% → 19.50% · 2 Aug 2017: 6.25% → 18.75% · 6 Jun 2018: 6.50% → 19.50% · 1 Aug 2018: 6.75% → 20.25% · 7 Feb 2019: 6.50% → 19.50% · 4 Apr 2019: 6.25% → 18.75% · 6 Jun 2019: 6.00% → 18.00% · 7 Aug 2019: 5.65% → 16.95% · 4 Oct 2019: 5.40% → 16.20% · 27 Mar 2020: 4.65% → 13.95% · 22 May 2020: 4.25% → 12.75% · 4 May 2022: 4.65% → 13.95% · 8 Jun 2022: 5.15% → 15.45% · 5 Aug 2022: 5.65% → 16.95% · 30 Sep 2022: 6.15% → 18.45% · 7 Dec 2022: 6.50% → 19.50% · 8 Feb 2023: 6.75% → 20.25% · 7 Feb 2025: 6.50% → 19.50% · 9 Apr 2025: 6.25% → 18.75% · 6 Jun 2025: 5.75% → 17.25% · 5 Dec 2025: 5.50% → 16.50%. The RBI kept the Bank Rate at 5.50% in its statements; its next decision was scheduled for 7 October 2026. If the rate changes, or your invoices go back before 2 June 2015, add the rate in the calculator.

Claiming the money: MSME Samadhaan and the Facilitation Council

1. Check you can claim: you must be a micro or small enterprise (from 1 April 2025: micro — investment up to ₹2.5 crore and turnover up to ₹10 crore; small — up to ₹25 crore and ₹100 crore), registered on Udyam before the date of the invoice in dispute, and a manufacturer or service provider rather than a trading unit. The buyer must be in India.
2. Send a demand (not legally required — FAQ Q.19 — but it often settles the matter) with the statement of interest.
3. File on the MSME Samadhaan portal or directly with your State’s Micro and Small Enterprises Facilitation Council, with the purchase order (or an affidavit if it was oral), the invoices and proof of delivery. Interest alone can be claimed even after the principal was paid (FAQ Q.20).
4. The Council first tries conciliation, then decides the dispute as an arbitration, and should finish within 90 days of the reference (s.18). A buyer that wants to challenge the award must first deposit 75% of it in court (s.19).

Tax and accounts

• The interest is not deductible for the buyer under the Income-tax Act (MSMED s.23), and a buyer whose accounts are audited must show unpaid principal and interest separately in them (s.22).
• A buyer that pays a micro or small enterprise after the s.15 time limit can deduct the purchase only in the year it actually pays — Income-tax Act, 2025 s.37(1) and (2)(g) (in force from 1 April 2026), earlier s.43B(h) of the Income-tax Act, 1961.
• Interest the supplier receives is part of its income; ask your chartered accountant how to account for interest that is claimed but not yet received.

Sources

• MSMED Act, 2006 — ss.2(b), 2(n), 15–19, 22, 23
• RBI monetary policy statements — Bank Rate (latest: 5 August 2026)
• MSME Samadhaan — FAQ — Q.6, 18, 19, 20, 23, 33, 36
• Udyam Registration — classification limits from 1 April 2025
• Income-tax Act, 2025 — s.37
• Indian Contract Act, 1872 — ss.59–61 (appropriation of payments)

Limitations

• An estimate, not legal or tax advice. A Council or court may count part months, rate changes or payments differently — have a lawyer or chartered accountant check the statement before you rely on it.
• It does not decide disputes about quality, short supply or whether goods were rightly rejected; those are outside the MSMED Act (FAQ Q.22).
• The Bank Rate table covers 2 June 2015 to the date it was checked; add any later change yourself.
• Up to 50 invoices and 100 payments, typed in one by one; there is no bulk import.

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