How to calculate of discount: Discounts play a crucial role in our daily shopping experience, whether it’s a festive sale, a seasonal offer, or a bulk purchase discount. Understanding how to calculate discounts can help you make smarter financial decisions, save more money, and even negotiate better deals. In this guide, we will explain the discount calculation process in simple terms with real-life examples.
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How to calculate of discount
A discount is a reduction in the original price of a product or service, offered by a seller to attract buyers. Discounts can be percentage-based, fixed-amount reductions, or bulk discounts. In India, retailers and e-commerce platforms frequently offer discounts during special events like Diwali sales, end-of-season sales, and festive offers on platforms like Flipkart, Amazon, and local stores.
Types of Discounts in India
- Percentage-Based Discount – The most common type, where a certain percentage is reduced from the original price. Example: A 20% discount on ₹1,000 means you save ₹200.
- Flat or Fixed-Amount Discount – A specific amount is deducted from the original price. Example: A ₹500 discount on a ₹3,000 product makes the final price ₹2,500.
- Buy One Get One Free (BOGO) – You receive an extra item free with a purchase, effectively reducing the per-unit cost.
- Bulk Purchase Discount – Often used in wholesale markets, where buying in bulk gets you a lower price per unit.
- Seasonal & Festival Discounts – Offered during Diwali, Holi, Independence Day, etc., where brands slash prices to boost sales.
How to Calculate Discount?
1. Percentage Discount Calculation
Formula:
Discount Amount = (Original Price × Discount %) / 100
Final Price = Original Price – Discount Amount
Example: If a T-shirt costs ₹2,000 and is on a 25% discount:
Discount Amount = (₹2,000 × 25) / 100 = ₹500
Final Price = ₹2,000 – ₹500 = ₹1,500
2. Fixed-Amount Discount Calculation
Formula:
Final Price = Original Price – Discount Amount
Example: A mobile phone costs ₹15,000 and has a ₹2,000 discount:
Final Price = ₹15,000 – ₹2,000 = ₹13,000
3. Successive Discounts (Multiple Discounts)
When two or more discounts apply successively, they are not simply added. Instead, the second discount is applied to the already reduced price.
Formula:
Final Price = Price after First Discount – (Price after First Discount × Second Discount %) / 100
Example: A ₹10,000 product has a 20% discount, followed by an additional 10% discount.
First Discount = (₹10,000 × 20) / 100 = ₹2,000 → New Price = ₹8,000
Second Discount = (₹8,000 × 10) / 100 = ₹800 → Final Price = ₹7,200
4. Buy One Get One Free (BOGO) Calculation
BOGO offers effectively reduce the price per unit.
Example: A pair of jeans costs ₹2,000, and there is a Buy One Get One Free offer. Effectively, you get 2 jeans for ₹2,000, meaning each pair costs ₹1,000 instead of ₹2,000.
5. GST and Discount Calculation in India
In India, discounts can be pre-GST or post-GST. If a discount is applied before GST, you pay tax on the discounted price. If applied after GST, you pay tax on the original price, which increases the total cost.
Pre-GST Discount Example: A laptop costs ₹50,000 with a 10% discount and 18% GST.
Discount Amount = (₹50,000 × 10) / 100 = ₹5,000
New Price = ₹50,000 – ₹5,000 = ₹45,000
GST Amount = (₹45,000 × 18) / 100 = ₹8,100
Final Price = ₹45,000 + ₹8,100 = ₹53,100
Post-GST Discount Example: If the same 10% discount is applied after GST:
GST on ₹50,000 = (₹50,000 × 18) / 100 = ₹9,000
Total Price = ₹50,000 + ₹9,000 = ₹59,000
Discount = (₹59,000 × 10) / 100 = ₹5,900
Final Price = ₹59,000 – ₹5,900 = ₹53,100
Best Practices to Maximize Discounts in India
- Use Coupons & Promo Codes – E-commerce websites often offer additional discounts via coupons.
- Wait for Festive Sales – Discounts are highest during events like Big Billion Days, Amazon Great Indian Festival, and New Year sales.
- Compare Prices Online – Use price comparison sites to find the best deals.
- Cashback & Wallet Offers – Platforms like Paytm, Google Pay, and PhonePe provide cashback on certain transactions.
- Credit Card & EMI Offers – Some bank cards offer additional discounts or cashback when used on partner stores.
Conclusion
Calculating discounts is an essential skill for making smart purchasing decisions in India. Whether you’re shopping online, bargaining at a local market, or looking for festival deals, knowing how to compute discounts accurately will ensure you get the best value for your money. Keep an eye on successive discounts, understand how GST impacts the final price, and use additional offers to maximize your savings.