ICICI Credit Card EMI Calculator with GST Rate

EMI Formula:

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

EMI (without GST):

Total EMI (with GST on interest):

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1. What is EMI Calculation?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower pays to a lender each month. For credit cards, GST is applicable on the interest portion of the EMI.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula with GST on interest:

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

Where:

\( P \) — Principal loan amount (Rs)
\( R \) — Monthly interest rate (annual rate ÷ 12)
\( N \) — Loan tenure in months
\( I \) — Interest portion of the EMI
\( GST\ Rate \) — 18% (0.18 as decimal)

Explanation: The first part calculates standard EMI, then GST (18%) is added on the interest component.

3. Importance of GST on Credit Card EMI

Details: Since July 2017, GST is applicable on credit card EMIs. The 18% tax is levied only on the interest portion, not the principal amount.

4. Using the Calculator

Tips: Enter principal amount in Rs, annual interest rate in percentage, and tenure in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why is GST charged on credit card EMI?
A: As per Indian tax laws, financial services including credit card interest are subject to 18% GST.

Q2: Is GST charged on the entire EMI amount?
A: No, GST is only applicable on the interest portion of the EMI, not the principal.

Q3: How is monthly interest rate calculated?
A: Annual rate divided by 12 (months). For example, 24% annual rate becomes 2% monthly.

Q4: Does this calculator work for other bank credit cards?
A: Yes, the formula is universal, but interest rates may vary between banks.

Q5: Can I prepay my credit card EMI?
A: Most banks allow prepayment but may charge foreclosure fees. Check with your bank.