Penal charge calculator
Work out the penal charge on an overdue amount, and check it against the 2024 rules.
Charge the right amount, and see at a glance whether it meets the rules that came in during 2024.
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Penal charge
₹750.00
over 45 chargeable days
Chargeable days
45
No grace applied
Still overdue for
45 days
Grace reduces the charge, not the days past due
What the 2024 rules require of this charge
- Not higher than a business borrower pays2 against 2 for the same breach by a non-individual borrower.
- Not capitalised, and earns nothing itselfThe charge is not added to principal and no interest runs on it. It sits as its own balance until it is paid.
- No GSTPenal charges collected by banks and NBFCs are not taxable — 55th GST Council.
- Income when received, not when leviedIt appears on the borrower's statement on levy but reaches the profit and loss account only on receipt — which is why a statement and a trial balance can honestly differ.
Where the quantum and the reason have to appear
- The loan agreement, stating the quantum and the reason.
- The Key Facts Statement, or the most important terms and conditions.
- The lender's website, under interest rates and service charges.
- Every reminder sent for non-compliance must state the penal charge that applies.
The circular does not reach credit cards, external commercial borrowings, trade credits or structured obligations.
Where these numbers come from
The arithmetic is this page's own and runs in your browser. The rates it applies are not — they are read straight from the instrument named below, and a test fails the build if any of them is changed without the source changing with it.
It is a guide, not advice. Your own board-approved policy, your scheme terms and your auditor decide what applies to a particular account.
Source. RBI/2023-24/53, DoR.MCS.REC.28/01.01.001/2023-24, 18 August 2023 — Fair Lending Practice, Penal Charges in Loan Accounts. In force for new loans from 1 April 2024. Penal charges collected by banks and NBFCs are not taxable under GST, per the 55th GST Council. The circular does not reach credit cards, external commercial borrowings, trade credits or structured obligations. Read the Master Direction
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From the people who wrote this
Run your lending on Lenviq
A calculator settles one account. The reason lenders move to Lenviq is the other direction — the same rules applied to every account on the book without anyone opening a spreadsheet.
Lenviq is loan origination, servicing and accounting for NBFCs, built by FastLegal Technologies.