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Interest calculation in bills of exchange

Tejaswi Kasturi (student-cpt) (427 Points)

24 April 2012

If a bill is dishonored and and the acceptor requests the drawing of a fresh billl with interest, should the noting charges be included in the calculation of the interest? e.g. A draws a bill on B for 10,000 for 3 months. At the date of maturity, the bill is dishonored and noting charges of 100 were levied. Now B requests A to draw a fresh bill payable in 3 months with 18% p.a. Interest. Now would the Interest be 450 or 454.5?

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3 Replies

Dintakurthi Tirumala (CA FINAL) (15989 Points)
Replied 24 April 2012

I think it would be Rs.450 noting charges will not consider for the purpose of interest because bill amount is Rs.10000 and the noting charges is expenses for dishounour of the bill. However it will be depend on the terms and condition of the bill agrred upon at the time drawing of bill.

OM SAI SRI SAI JAI JAI SAI

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CA Rakesh Goenka (CA & CS) (872 Points)
Replied 24 April 2012

agree with above expert he has given u right answer

preity (student) (121 Points)
Replied 24 April 2012

i tink unless the noting charges is paid separately and not included in the face value of the new bill interest should be calculated even on noting charges paid refer 7.91 23rd sum..