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Contributor‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.
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Aman is a small Businessman in his town. Once upon a time, the electricity bill came with a huge amount (₹15,000), but Aman knew how to Calculate Electricity Bills.
Aman Said: First, determine how much energy you consume (kilowatt-hours) and then use the tariff rate per kWh to work out your bill. You can also get electricity bill calculators from the internet, which are run by your electricity board. The formula is: (Electricity Cost = Electricity Consumption (kWh) x Tariff). To obtain your electricity cost, take your electricity usage (in kWh) and multiply it by the applicable tariff rate.
In other words, energy consumption equals the electricity a house uses. With the help of meter readings or electricity bills, you can tell. Here’s how Aman did it:
Aman wanted to know how much electricity he had consumed in the last three months. He looked at his bills and wrote the kWh consumption for each month.
Month | Unit (KWH) | Cost (₹) |
January | 320 | ₹1,920 |
February | 280 | ₹1,680 |
March | 350 | ₹2,100 |
Aman noticed he used more electricity in March because he used the AC more. To save energy, he decided to:
By tracking his usage, Aman saved money and energy! You can do the same.
Tariff rate means the cost that is paid for each unit of electricity consumed (kWh). The tariff rate will be shown on your monthly or quarterly electricity bill. And this is how Aman calculated his tariff rate over the last 3 months:
Aman looked at his electricity bills as he calculated how much he paid per kWh by dividing the total amount paid for bills by how many of kWh he had used.
Month | Unit | Total Cost | Tariff Rate |
January | 320 | ₹1,920 | ₹6.00 per KWh |
Aman saw that his electricity company charged ₹6 per kWh every month.
Aman now knows his electricity rate and can estimate future bills. If he uses 400 kWh next month, his bill will be around 400 × ₹6 = ₹2,400.
By knowing the tariff rate, Aman can save money by using less electricity.
Your electricity bill is easily computed. It is easy to calculate how much you have spent on your electricity use, which you do by multiplying the number of units used by the tariff. Let me show how Aman calculated his bill for the last three months:
Read More – How to Cut Your Monthly Expenses in Half
Aman ran his meter readings and electricity bills through. He saw:
Month | Unit Used | Tariff Rate | Total Cost |
January | 320 | ₹6.00 per KWh | 320 × 6 = ₹1,920 |
If Aman uses 400 kWh in April:
400 × ₹6 = ₹2,400 (estimated bill).
Why This Helps?
Aman now tracks his electricity every month to avoid surprises! You can do it too.
Sometimes, electricity bills are not only counting up the usage units you consume. Aman was shocked to see his bill of ₹2,100 instead of only ₹1,800, with an additional ₹300. Let's break it down:
Charge Type |
Amount
How It’s Calculated?
Energy Charges (350 kWh)
₹2,100
350 unit x 6/kWh
Fixed Charges
₹150
Flat fee (depends on connection)
280 |
₹1,680 |
₹6.00 per KWh |
March | 350 | ₹2,100 | ₹6.00 per KWh |
280 |
₹6.00 per KWh |
280 × 6 = ₹1,680 |
March | 350 | ₹6.00 per KWh | 350 × 6 = ₹2,100 |
*T&C Apply
Electricity Duty (5%)
₹113 |
5% of ₹2,100 |
GST (7%)
₹158
7% of (₹2,100 + ₹150 + ₹113)
Total Bill
₹2,521
Sum of all charges
Tip: Look for a "bill details" section, where you can see lists of every charge. Aman now tracks all charges, not just units, to avoid bill shocks!
Calculating your electricity bill has to be a puzzle, like solving an easy jigsaw once you know the source. Aman became aware that knowing his bill is not only about looking at how much power he utilises. Not only the electrical consumption, but there will be additional fees on your bill that may include fixed taxes, and sometimes penalties. Aman can check his bill closely to beat mistakes, save money, and avoid surprises.
Also Read – How to Pay the Electricity Bill
Now, Aman's fixed fee, which can not change, won’t change even if he uses very little electricity. Since taxes are incorporated in the bill, you are advised to be conscious of your energy use, which can help you save money on taxes, too. Provided Aman regularly consults his meter, monitors his electricity use, and pays his bills in time, he can avert late fee charges.
1. Why is my electricity bill so high?
Your bill could be high because you used more units (like running AC/fans longer), or because of extra charges like taxes or fixed fees. Check your meter and compare it to past bills to spot changes.
2. How is my electricity bill calculated?
Your bill is mainly based on units used (kWh) × tariff rate (₹/kWh). But extra charges like fixed fees, taxes (GST), and duties are added too.
3. What is a fixed charge on my bill?
A fixed charge is a set fee you pay every month just for having an electricity connection, even if you use zero units. It depends on your connection type (home/shop).
4. How can I reduce my electricity bill?
Turn off unused lights/fans, use energy-saving appliances, and avoid peak-hour usage. Lowering your units used also reduces taxes!
5. What is the tariff rate, and how do I find mine?
The tariff rate is the price per unit (kWh). Find it by dividing your total bill cost by units used (e.g., ₹2,000 ÷ 400 kWh = ₹5/kWh).
6. Why are there taxes on my electricity bill?
Governments add small taxes (like GST or electricity duty) to your bill. These are a percentage of your total charges.
7. What should I do if my bill seems wrong?
Check your meter reading; if it doesn’t match the bill, contact your electricity provider. Mistakes can happen!
8. Can I get a discount on my electricity bill?
Some states offer subsidies for low-income households or farmers. Check with your provider if you qualify.
9. What happens if I pay my bill late?
Late payments often have a penalty fee (₹50–₹200). Always pay on time to avoid extra charges.
10. How can I track my electricity usage?
Note your meter reading every week or use a mobile app (like your provider’s app) to monitor usage and predict bills.
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