Indian finance formulas

Why this exists

These functions were pulled out of the calculators running at emicalcs.com because the arithmetic is the boring, reusable part — and because a surprising amount of Indian finance code on the internet gets three specific things wrong: it charges GST interest on the gross bill instead of the cash ledger, it treats a step-up SIP as free outperformance, and it hardcodes statutory figures that move by notification.

So: tax slabs, gratuity ceilings and GST rates are arguments with documented defaults, never hidden constants. You update them the day they change, without waiting for a release.

npm install indian-finance-formulas

1 · Reducing-balance EMI

The standard instalment on a reducing-balance loan. The one everyone knows, and the one worth getting exactly right, because a rupee of rounding here compounds across 240 instalments.

emi = P · i · (1+i)^n / ((1+i)^n − 1)      i = annualRate / 12 / 100

Full calculator with amortisation schedule and charts: EMI calculator · home loan

2 · Prepayment, with the EMI held fixed

Pay extra each month and keep the instalment constant, and the tenure shrinks. This is the version that saves the most interest, and it is the one most online tools model badly — they reduce the EMI instead, which feels better and saves far less.

prepayment({ principal: 3000000, annualRate: 8.5, months: 240, monthlyExtra: 5000 })
// { interestSaved, monthsSaved, newMonths, newInterest }

Full calculator: home loan prepayment calculator

3 · Step-up SIP — and the comparison nobody runs

A step-up SIP raises the monthly contribution by a fixed percentage every twelve months. It produces a bigger corpus than a flat SIP, and it is routinely sold as though the step-up itself were the reason.

It isn't. A step-up SIP does not beat a flat SIP of the same total outlay. It wins in headline terms only because more money goes in. Hold the money constant — put the same total into a flat schedule — and the flat schedule wins, because its rupees compound for longer. The playground below runs both, so you can see the gap close.

Full calculator: step-up SIP calculator · flat SIP

4 · GST late-payment interest — the cash-ledger rule

Rule 88B(1) charges interest on the tax actually debited from your electronic cash ledger — not on gross output liability. Running it on the gross bill is the single most common error in GST code, and it overstates the interest several times over.

gstInterest(30000, 30);    // 443.84  — correct: ₹30,000 paid in cash
gstInterest(100000, 30);   // 1479.45 — the common error, 3.3× too high

Full calculator: GST interest calculator · GST calculator

5 · Gratuity, with the ceiling as a parameter

Under the Code on Social Security, 2020 (in force 21 Nov 2025): lastSalary × 15/26 × completedYears, capped. The cap is ₹20,00,000 for most employees and ₹25,00,000 for Central Government civil employees — so it is an option, not a constant. Service of six months or more rounds up to a full year.

Full calculator: gratuity calculator

6 · New-regime income tax, and the 87A cliff

Section 115BAC slabs, FY 2026-27 defaults. The part that trips up hand-written code is Section 87A marginal relief: tax is nil up to ₹12,00,000 taxable, but just above it the tax cannot exceed the income above the threshold. Without that clamp, earning one rupee more costs you tens of thousands — which is not what the law says.

incomeTaxNewRegime(1200000);   // { tax: 0,      cess: 0,     total: 0 }
incomeTaxNewRegime(1210000);   // clamped by marginal relief, not 61,500

Full calculator with both regimes, deductions and age bands: income tax calculator

Everything else in the library

• amortisation() — month-by-month opening / interest / principal / closing
• sipFutureValue(), lumpsum(), cagr()
• gstAdd(), gstRemove() — inclusive and exclusive of tax
• annualContributionMaturity() — annual-contribution schemes such as PPF and Sukanya Samriddhi

Full API, worked examples and the reasoning behind each default: github.com/javeed450-sudo/indian-finance-formulas.