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Interest calculator for money recovery suits and legal notices
Enter the principal, the annual rate and the dates. The calculator shows the number of days, the interest accrued and the total, using simple interest on actual days or compound interest at the rests you choose.
Last updated 9 October 2026
Claim details
Use the contract rate, or the rate you intend to claim.
Interest
Simple interest is worked out on actual days over a 365-day year. For compound interest, each whole rest adds interest to the balance and the remaining days are charged at simple interest. Amounts are rounded to the nearest rupee. Nothing you enter is saved.
Which rate of interest to use
- Contract: where the agreement, invoice terms or instrument states a rate, that rate governs the period before the suit, subject to the court's power to reduce a rate it finds penal or excessive.
- No agreed rate: under Section 3 of the Interest Act, 1978, a court may allow interest at a rate not exceeding the current rate of interest, from the date the debt was payable under a written instrument or, otherwise, from the date of a written notice claiming interest. This is one reason a demand notice should claim interest expressly.
- Negotiable instruments: where a cheque, promissory note or bill of exchange specifies no rate, Section 80 of the Negotiable Instruments Act, 1881 provides for eighteen per cent a year.
- Delayed payments to micro and small enterprises: Section 16 of the MSMED Act, 2006 provides compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India, whatever the contract says.
The three periods of interest in a money suit
Before the suit
From the date the amount fell due to the date of filing. This is a matter of substantive law: contract, usage or statute. It is calculated to a figure and added to the claim, and court fee is paid on it.
Pending the suit
From the date of filing to the date of the decree. Section 34 of the Code of Civil Procedure leaves the rate to the court, which may award such rate as it deems reasonable on the principal sum adjudged.
After the decree
From the date of the decree to payment. Section 34 limits this to six per cent a year on the principal, except that for a liability arising out of a commercial transaction the court may award more, up to the contractual rate or, where there is none, the rate at which nationalised banks lend for commercial transactions.
A worked example
A supplier is owed ₹8,50,000 from 1 April 2024 and files suit after 31 March 2026, claiming interest at twelve per cent a year. That is 729 days. Simple interest comes to ₹2,03,721, making the claim ₹10,53,721 on the date of filing. If the contract had provided for compounding with monthly rests, the interest would be ₹2,29,128.
Interest calculator for recovery suits: common questions
What rate of interest will a court award?
For the period before the suit, the court looks first to the contract, then to trade usage or a statute such as the Interest Act, 1978. From the date of the suit to the decree, the rate is in the court's discretion under Section 34 of the Code of Civil Procedure. From the decree to payment, Section 34 caps the rate at six per cent a year unless the liability arose from a commercial transaction.
Can I claim compound interest in a recovery suit?
Only where a contract, a statute or an established trade usage allows it. One statutory example is Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, which gives a micro or small enterprise supplier compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India.
What rate applies to a cheque or promissory note that states no rate?
Under Section 80 of the Negotiable Instruments Act, 1881, where no rate of interest is specified in the instrument, interest is calculated at eighteen per cent a year from the date the amount ought to have been paid until realisation or until a date the court directs.
How is interest usually set out in a plaint?
In three parts: interest up to the date of the suit, which is calculated and added to the claim; interest pending the suit, which is prayed for at a stated rate; and future interest from the decree until payment. Interest calculated up to the date of filing forms part of the amount on which the suit is valued.
Draft the notice and the plaint from the same figures
In Settl, the claim amount, interest and dates sit on the matter record and flow into your demand notice, plaint and invoice, on your firm letterhead.
Not legal advice. This calculator gives general information from the dates and figures you enter. It does not account for every exclusion, extension or local rule. Check the statute and current case law, and have a qualified advocate confirm any date or amount you intend to rely on. Settl is not a law firm.