About discount calculation
A discount is a reduction from the original price (Maximum Retail Price or MRP), expressed as a percentage or a flat amount. Indian retail commonly uses MRP, sale price, and a single or stacked discount on the price tag. Stacked discounts are the tricky part: 30 percent plus 10 percent is not 40 percent. The second discount applies to the already-discounted price, so the combined effect is always smaller than the sum.
This calculator handles both single and stacked-discount scenarios, computes the effective discount percentage, and shows the breakdown step by step so you can verify the merchant's math at checkout.
How the formula works
The percentage form of a discount converts to a multiplicative factor. A 30 percent discount means you pay 70 percent of the price, written as a factor of 0.70. Stacked discounts multiply their factors.
Final price = MRP x (1 - d1) x (1 - d2)
Effective discount = 1 - (1 - d1) x (1 - d2)
Savings = MRP - Final price
For 30 percent + 10 percent:
Effective = 1 - (1 - 0.30) x (1 - 0.10)
= 1 - 0.70 x 0.90
= 1 - 0.63
= 0.37 or 37 percent
Never 40 percent.
The same logic extends to three or more stacked discounts. A typical "Flat 50 + Extra 10 + Coupon 5" stack on a clothing site yields an effective discount of 1 minus 0.5 times 0.9 times 0.95, equal to 57.25 percent, not 65 percent.
Worked example
An e-commerce listing shows MRP of 2,000 rupees with a flat 30 percent discount plus an additional bank-coupon 10 percent off at checkout.
- MRP: 2,000 rupees.
- After 30 percent off: 2,000 times 0.70 equals 1,400 rupees.
- After additional 10 percent off: 1,400 times 0.90 equals 1,260 rupees.
- Savings: 2,000 minus 1,260 equals 740 rupees.
- Effective discount: 740 divided by 2,000 times 100 equals 37 percent (not 40 percent).
Common stacked-discount combinations
| Discount stack | Naive sum | Effective | Hidden gap |
|---|---|---|---|
| 10 + 10 | 20 | 19.0 | 1.0 |
| 20 + 10 | 30 | 28.0 | 2.0 |
| 30 + 10 | 40 | 37.0 | 3.0 |
| 40 + 10 | 50 | 46.0 | 4.0 |
| 50 + 10 | 60 | 55.0 | 5.0 |
| 50 + 20 | 70 | 60.0 | 10.0 |
| 50 + 50 | 100 | 75.0 | 25.0 |
| 50 + 20 + 10 | 80 | 64.0 | 16.0 |
The gap widens fast at high discount levels. A "50 + 50" stack is never a free product.
Common pitfalls
- Adding percentages. Treating 30 percent + 10 percent as 40 percent overstates savings by three percentage points. Always multiply factors instead.
- Confusing MRP with selling price. Many products are routinely sold at 5 to 20 percent below MRP. A 30 percent discount off MRP may be only 10 to 15 percent off the going market price.
- Ignoring GST timing. If GST is on the discounted base (invoice-recorded discount), savings are higher than if GST is on MRP first. Check the invoice.
- Coupon code minimums. Many coupons require a minimum cart value or apply only to specific categories. A 10 percent coupon may not stack with a flat discount.
- Free-shipping headline. Free shipping above 499 rupees is not a discount; it is a hidden shipping fee waiver. Factor in the previous shipping cost to compare.
- Restocking and return fees. A 40 percent discount paired with a 5 percent restocking fee on return makes the discount conditional. Read return policies before buying clearance items.
Related tools
Frequently asked questions
Why is a 30 percent plus 10 percent stack not equal to 40 percent off?
The second discount applies to the already-discounted price, not the original. Starting at 100 rupees, a 30 percent discount yields 70 rupees, then a 10 percent discount on 70 rupees removes another 7 rupees, leaving 63 rupees. Total saving is 37 rupees, not 40. The effective combined discount is 37 percent, never 40.
What is the formula for stacked discounts?
Final price equals original price times (1 minus d1) times (1 minus d2). For two discounts d1 and d2 expressed as decimals, the combined effective discount equals 1 minus (1 minus d1) times (1 minus d2), which always sits below d1 plus d2.
How do I calculate the effective discount from MRP and sale price?
Effective discount equals (MRP minus sale price) divided by MRP, multiplied by 100. If the MRP is 2000 rupees and the sale price is 1260 rupees, the effective discount is (2000 minus 1260) divided by 2000 times 100, equal to 37 percent. The tool above shows this computation in the breakdown table.
Does GST apply before or after the discount?
In India, GST is calculated on the discounted price when the discount is recorded on the invoice itself. So if the MRP is 2000 rupees with 30 percent off and 18 percent GST, the GST is charged on the 1400 rupees sale price, not on 2000. Promotional discounts shown only on the cash memo do not change the GST base.
How is buy-one-get-one (BOGO) different from a percentage discount?
Buy-one-get-one free is equivalent to a 50 percent discount across the two items. Buy-two-get-one is roughly 33.33 percent off. BOGO benefits the retailer because the customer must buy at least two units to access the offer; percentage discount is more flexible because it applies to single units. Same headline saving, different basket size.