MSME Delayed Payment Interest Calculator
Interest a buyer owes an MSE supplier for late payment under the MSMED Act: compound interest at three times the RBI bank rate.
How to use the MSME Delayed Payment Interest calculator
- Enter invoice amount, agreed credit period (days, max 45), days from delivery to payment and rBI bank rate.
- Read the interest owed at the top of the result, with days late, rate applied (3 × bank rate), invoice + interest underneath. It updates as you type.
- Change one input at a time to see what moves the answer most, then save the result with Copy link or Download PDF.
About this tool
Under Sections 15–16 of the MSMED Act, buyers must pay micro and small suppliers within the agreed period, capped at 45 days. Late payment carries compound interest with monthly rests at three times the RBI bank rate.
Formula: Interest = amount × ((1 + 3·bank rate ÷ 12)^(days late ÷ 30) − 1), compounded monthly
Worked example
With invoice amount of ₹5,00,000, agreed credit period (days, max 45) of 45, days from delivery to payment of 120 and rbi bank rate of 5.75%:
| Interest owed | ₹18,163 |
| Days late | 75 |
| Rate applied (3 × bank rate) | 17.25% |
| Invoice + interest | ₹5,18,163 |
Built and reviewed by Savitar Finance (savitarfinance@gmail.com). Rules and rates last checked October 2026. How we calculate · Report a problem
Questions people ask
What is Section 43B(h)?
Since FY 2023-24, a buyer can deduct payments owed to micro and small enterprises only in the year they are actually paid, if paid beyond the MSMED Act limit.
How do I claim delayed payment interest?
Raise it with the buyer first. If unpaid, file on the government's MSME Samadhaan portal for the state's facilitation council.