Prepared by Finin2min Editorial Desk · Rates and rules verified 5 October 2026
Simple interest = principal × rate × time. Enter a duration or exact dates, add your tax slab and inflation, and see the interest, the amount, what you keep after tax and how it compares with compounding.
Simple interest is interest calculated only on the original principal. The interest for every year is the same, so the amount grows in a straight line. Compound interest, by contrast, earns interest on interest. For short periods the two are close; for long periods compounding pulls far ahead.
Formula: SI = P × R × T ÷ 100. Total amount A = P + SI. To find the rate: R = SI × 100 ÷ (P × T). To find the time: T = SI × 100 ÷ (P × R).
₹1,00,000 at 8% per year for 2 years 6 months (2.5 years): SI = 1,00,000 × 8 × 2.5 ÷ 100 = ₹20,000. Amount = ₹1,20,000. If the same money compounded annually at 8%, it would earn ₹21,216 — ₹1,216 more.
The calculator applies your slab rate plus 4% cess to the interest to show what you keep.
Use simple interest for flat-rate arrangements and statutory interest that is defined as simple. Use our compound interest calculator for fixed deposits, mutual funds and most savings products, where interest is added back to the balance.
Convert the period to years: months ÷ 12 and days ÷ 365. For example, 8 months at 9% on ₹50,000 is 50,000 × 9 × (8/12) ÷ 100 = ₹3,000.
In date mode this calculator counts actual days between the start and end date and divides by 365. Some lenders use a 360-day year or count both end dates; check your agreement.
Yes. Interest is taxable income. It is added to your other income and taxed at your slab rate; banks and post offices deduct TDS once yearly interest crosses the threshold.
Compound interest earns more for the lender or investor over time, and costs more for the borrower. Simple interest is lower for long periods at the same rate.
No. It computes plain interest on the principal. Late fees, GST on charges and penal interest are separate and depend on your contract.
Rates and rules shown here were checked against the sources above on 5 October 2026. Government notifications can change a rate or rule at short notice; always confirm on the official site before you invest, file or claim.
Educational estimate only. Tax, legal, financial or regulatory treatment depends on facts and the law applicable to the relevant period. Verify the current official source or obtain professional advice before acting.
Scope: Simple (non-compounding) interest on a lump sum, with optional post-tax and inflation-adjusted views.
The calculation engine was checked against an independently written reference implementation across 180 simple-interest input combinations, and against published figures where the scheme publishes them. Review date: 5 October 2026.
Prepared by Finin2min Editorial Desk. Educational estimate only.
Background, worked examples and the rules behind these numbers.