MSME Samadhaan Interest Calculator
Compute the compound interest a buyer owes a micro or small supplier on overdue payments — three times the RBI bank rate, with monthly rests, live.
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- Rules cited on the page
Enter your figures — the result on the right updates as you type.
Interest computation
Sec 16 · monthly compoundingFile your MSME Samadhaan claim with a CA
We register your delayed-payment complaint on the MSME Samadhaan portal and pursue recovery before the MSEFC.
Disclaimer: Indicative estimate under Section 16 of the MSMED Act 2006 using monthly-rest compounding on a days/30 basis. Actual interest depends on the exact RBI bank rate notified for each period and the certified appointed day. Not legal advice.
Section 16 MSMED Act — the delayed-payment rule
Under Sections 15–16 of the Micro, Small and Medium Enterprises Development Act, 2006, a buyer must pay a registered micro or small supplier on or before the appointed day — the date agreed in writing, or failing that, 45 days from acceptance of the goods or services. If payment is late, Section 16 obliges the buyer to pay compound interest with monthly rests at three times the bank rate notified by the RBI, from the appointed day, regardless of any agreement to the contrary.
How the interest is computed
The payable interest rate equals 3 × the RBI bank rate. That annual rate is then compounded monthly over the delay period. Expressed as a formula, with P = principal, r = 3 × bank rate (% p.a.) and m = months of delay (days ÷ 30):
Because the interest compounds monthly at more than triple typical bank lending rates, delayed payments to MSMEs become expensive quickly — which is exactly the deterrent Parliament intended.
Key terms explained
Appointed day
The day immediately after 45 days from the buyer's acceptance (or deemed acceptance) of the goods or services — or the date agreed in writing if earlier. Interest under Section 16 runs from this day until payment.
RBI bank rate
The standard rate at which the RBI is prepared to buy or rediscount eligible bills — currently 6.5%. Section 16 uses three times this rate as the interest rate on overdue MSME payments.
MSME Samadhaan portal
The government portal (samadhaan.msme.gov.in) where a registered micro/small supplier files a delayed-payment application online against the buyer, which is then taken up by the facilitation council.
MSEFC
The Micro & Small Enterprises Facilitation Council constituted by each State conciliates and arbitrates delayed-payment disputes, and can direct the buyer to pay the principal plus the Section 16 compound interest.
Disallowance u/s 23
Section 23 of the MSMED Act states this interest paid or payable is not allowed as a deduction to the buyer under the Income-tax Act — so the buyer bears the full cost with no tax shield.
Overriding effect
Section 16 applies notwithstanding any agreement between the parties. A contract clause waiving interest or allowing a longer credit period cannot override the statutory 45-day rule for registered MSMEs.
Questions people ask
Short answers on MSME Delayed Payment Interest. Tap a question to open it.
01What is the 45-day rule?
Under section 15 of the MSMED Act, a buyer must pay a micro or small supplier by the date agreed in writing, and in any case within 45 days of acceptance or deemed acceptance of the goods or services. Any longer agreed period is void to that extent.
02What interest is payable on a delayed payment?
Compound interest with monthly rests at three times the bank rate notified by the RBI, from the appointed day until payment. It is payable whether or not the supplier claims it in the invoice.
03Is the interest deductible for the buyer?
No. Section 23 of the MSMED Act expressly disallows the interest paid or payable as a deduction in computing income, so it is a real, post-tax cost.
04Can the supplier waive the interest?
A contractual waiver in advance is not effective, because the statutory right cannot be contracted away. A commercial settlement after the liability arises is a different matter and is common in practice.
05Does the rule apply to medium enterprises?
No. The delayed-payment protection in Chapter V applies only to micro and small enterprises. Medium enterprises are covered by Udyam registration for other benefits but not by section 15.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.