How it is calculated
Periods = chargeable delay ÷ days in the period (1, 7 or 30), pro rata or rounded up
LD = base value × LD rate % × periods
LD payable = the lower of LD and (cap % × contract value)
- CPWD preset: clause 2 of the CPWD General Conditions of Contract 2023 for construction works. If the contractor fails to keep the required progress or to finish by the contract or justified extended date, compensation is levied at a maximum rate of 1% of the accepted tendered value per month of delay, computed per day, as the authority in Schedule F decides. The total cannot exceed 10% of the accepted tendered value. The calculator applies the maximum rate; the authority may levy less.
- DoE presets: Manual for Procurement of Works, Second Edition 2025, para 7.4.7 (Department of Expenditure). For repair works costing up to ₹20 lakh, 1% of the contract value per week of delay; for all other works, 0.5% per week; maximum 5% of the contract value, raised to 10% in cases of inordinate delay. The contract value here includes variations, taxes and duties.
- Extension of time: delays caused by the employer, scope changes, hindrances or force majeure that the engineer accepts are excluded before LD is worked out. Enter the extension actually granted, not the extension asked for.
- As per contract: many private, PSU and EPC contracts levy LD per day or per week on the value of the delayed portion, or on the whole price, with their own cap. Enter that clause.
Worked example
Illustrative numbers. A ₹1,00,00,000 CPWD-pattern contract was due on 30 June 2026 and finished on 15 October 2026, 107 days late. The engineer granted a 30-day extension for hindrances, so 77 days are chargeable. At 1% a month, LD runs at ₹1,00,000 a month, or ₹1,00,000 × 77 ÷ 30 = ₹2,56,667. That is below the 10% cap of ₹10,00,000, so ₹2,56,667 is recoverable.
Under the DoE manual's 0.5% a week rule for the same delay, LD would be ₹50,000 × 77 ÷ 7 = ₹5,50,000, but the 5% cap holds it to ₹5,00,000.
When the rule differs
State public works departments, municipal bodies, railways, NHAI and PSUs have their own compensation-for-delay clauses, often with milestone-wise deductions that are refunded if the work is finished on time overall. Courts treat the stated LD as the upper limit of compensation under s.74 of the Indian Contract Act 1872, and the amount levied depends on the employer's decision under the contract. Check your contract clause and the extension-of-time orders before relying on a figure.
Sources: CPWD General Conditions of Contract 2023 (Construction Works), clause 2; Manual for Procurement of Works, Second Edition 2025, para 7.4.7 (Department of Expenditure). Checked 25 October 2026.
Common questions
What is the LD rate under CPWD clause 2?
The CPWD General Conditions of Contract 2023 set a maximum rate of 1% of the accepted tendered value per month of delay, computed per day, as decided by the authority in Schedule F. The total cannot exceed 10% of the accepted tendered value.
What LD rate does the DoE Works Manual 2025 suggest?
Para 7.4.7 suggests 1% of the contract value per week for repair works costing up to ₹20 lakh and 0.5% per week for other works, with a maximum of 5% of the contract value, or 10% for inordinate delay.
Is extension of time deducted before LD is calculated?
Yes. LD is levied only for delay attributable to the contractor. Periods for which the engineer grants extension of time, such as hindrances, extra work or force majeure, are excluded.
Is LD calculated on the whole contract value or only the delayed work?
It depends on the clause. CPWD and the DoE manual apply the rate to the contract value. Some contracts apply it to the value of the portion that is late. The calculator handles both under the custom option.
How is LD shown for GST?
The DoE Works Manual 2025 says liquidated damages should be shown by the contractor as a deduction on the invoice value. Confirm the GST treatment with your tax adviser.