Last updated: June 2026
This page explains exactly how each category of calculator on CalcuTools India works — the formula used, the assumptions made, and the official source we rely on for any government-set rate. We believe financial tools should not be a black box, especially when the results inform real decisions about loans, taxes, and investments.
All EMI calculations use the standard reducing-balance amortisation formula prescribed by the Reserve Bank of India for retail lending:
Where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the loan tenure in months. Bank reference rates shown as defaults (SBI, HDFC, ICICI etc.) are updated whenever these banks publish new MCLR or repo-linked lending rate changes, typically following an RBI Monetary Policy Committee meeting.
SIP future value uses the standard future value of an annuity formula used across the Indian mutual fund industry and recommended by AMFI (Association of Mutual Funds in India):
Where P is the monthly SIP instalment, i is the monthly expected rate of return, and n is the number of instalments. Default return assumptions (typically 12% per annum for equity funds) are illustrative long-term averages and not guaranteed returns — actual mutual fund returns vary and are subject to market risk.
Income tax slab logic is rebuilt directly from the Finance Bill / Union Budget each year. For FY 2025-26, this reflects the revised new tax regime slabs with the ₹12 lakh effective zero-tax threshold (after rebate under Section 87A), along with applicable cess (4% Health & Education Cess) and surcharge for higher income bands. Capital gains calculations reflect the post-Budget 2024 LTCG (12.5%) and STCG (20%) rates on equity and equity mutual funds. GST calculations use the current 2-slab GST 2.0 structure (5% and 18%, with 40% for sin/luxury goods) as notified by the GST Council.
Interest rates for all small savings schemes are set quarterly by the Ministry of Finance, Department of Economic Affairs, via official notification — not by individual banks or post offices. We update our default rates within days of each quarterly notification (typically released in the last week of March, June, September, and December). Compounding frequency (annual for PPF/NSC/KVP, quarterly for SCSS) follows the official scheme rules published by India Post and the National Savings Institute.
EPF interest rate is set annually by the EPFO Central Board of Trustees and notified by the Ministry of Labour. Our EPF calculator compounds interest annually as per EPFO's actual crediting practice. NPS calculators use the historical average return assumptions published by NPS Trust for equity (Scheme E), corporate debt (Scheme C), and government securities (Scheme G) asset classes, blended according to the allocation you select.
Salary structuring calculators (CTC to in-hand, gratuity, salary hike) follow standard Indian payroll conventions: EPF employee contribution at 12% of basic (subject to wage ceiling rules), professional tax per applicable state slabs, and gratuity calculated per the Payment of Gratuity Act 1972 formula: (Last drawn salary × 15 × years of service) ÷ 26.
If you believe a rate is outdated or a formula produces an incorrect result, please visit our Contact page. We treat calculation accuracy as our highest priority and typically resolve verified errors within 48 hours.