Credit Card EMI Calculator with GST on Interest

EMI Formula with GST on Interest:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \] \[ GST = I \times Tax\ Rate \]

Principal Amount (P):

₹

Annual Interest Rate (APR):

Loan Tenure:

months

GST Rate:

EMI Amount:

Total Interest:

GST on Interest:

Total Payment (Principal + Interest + GST):

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1. What is EMI Calculation with GST?

The Credit Card EMI Calculator computes your monthly installment payments including the Goods and Services Tax (GST) applied on the interest component of your EMI. This is particularly important in countries like India where 18% GST is levied on credit card interest charges.

2. How Does the Calculator Work?

The calculator uses these formulas:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \] \[ GST = I \times Tax\ Rate \]

Where:

\( P \) — Principal loan amount (₹)
\( R \) — Monthly interest rate (APR/12 as decimal)
\( N \) — Loan tenure in months
\( I \) — Total interest over loan period (₹)
\( Tax\ Rate \) — GST rate as decimal (e.g., 18% = 0.18)

Explanation: The EMI formula calculates your fixed monthly payment, while the GST formula computes the tax applied only to the interest portion of your payments.

3. Importance of GST on Credit Card Interest

Details: Since 2017, India has levied 18% GST on credit card interest charges. This additional cost must be factored into your total repayment amount when converting purchases to EMIs.

4. Using the Calculator

Tips: Enter the principal amount (purchase value), annual interest rate (check your card's APR), loan tenure in months, and applicable GST rate (18% in India). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why is GST charged only on the interest component?
A: GST is a tax on services, and the interest charged by banks is considered a financial service. The principal amount is not taxed as it's the actual purchase value.

Q2: Is GST applicable on all credit card EMIs?
A: Yes, GST applies to all credit card EMIs in India, whether for purchases or cash advances, as long as interest is charged.

Q3: How does GST affect my total repayment amount?
A: GST adds approximately 1-3% to your total repayment amount, depending on your interest rate and loan tenure.

Q4: Can I avoid GST on credit card EMIs?
A: You can avoid GST by paying your full balance before the due date (no interest charged) or opting for no-cost EMIs where the interest is waived (though processing fees may apply).

Q5: Is this calculator applicable worldwide?
A: The EMI formula is universal, but GST rates vary by country. Adjust the tax rate according to your local regulations.