Fundamentals of Financial and Cost Accounting · Bills of Exchange

Maturity Date and Days of Grace in Bills of Exchange

Updated 10 October 2026 · Fact-checked

The maturity date of a bill is the date on which it falls due for payment. Take the date of the bill (or of acceptance for bills payable after sight), add the term, then add 3 days of grace. Bills payable on demand or at sight get no grace. If the date falls on a public holiday, the bill falls due on the preceding business day.

Understand Maturity Date, Days of Grace and Term of Bill

A bill of exchange is not always paid on the day it is written. It usually says it is payable after a fixed period, such as 60 days or 3 months. The date on which this period ends, with grace added, is the date of maturity. This is the day the acceptor must pay.

The term of the bill is the period stated in the bill. A bill can be payable after date, which means the period is counted from the date of drawing. It can be payable after sight, which means the period is counted from the date the drawee accepts it. Do not mix these two starting points.

Days of grace are 3 extra days added to the end of the term. They give the acceptor a little more time to arrange money. The due date is the last day of the term. The date of maturity is the due date plus 3 days of grace. For exam questions, the date of maturity is the day the bill is presented and paid.

Be careful with the word sight. A bill payable on demand or at sight (on presentation) has no stated period, so it gets no grace and is due when it is presented. A bill payable a stated period after sight, such as 60 days after sight, is a time bill. It does get 3 days of grace, counted after that period ends.

If the date of maturity falls on a Sunday or other public holiday, the bill is treated as due on the preceding business day. This is the rule in Section 25 of the Negotiable Instruments Act. There is one exception. If the day is an emergency holiday declared at short notice, or a day that becomes a holiday, the bill falls due on the next following business day. Exam questions normally test the ordinary public holiday rule.

When the term is in months, count calendar months, not 30-day blocks. A bill drawn on 15 January for 2 months falls due on 15 March. If the month you land on is shorter, use its last day. Then add 3 days of grace. When the term is in days, count the exact days using the real length of each month.

Key formulas to remember

Date of maturity: Date of maturity = Starting date + Term of bill + 3 days of grace; Use for bills payable after date or after sight (a stated period). No grace for bills payable on demand or at sight.
Starting date for bill after date: Starting date = Date of drawing of the bill; Do not count the starting day itself. Count from the next day.
Starting date for bill after sight: Starting date = Date of acceptance; The period starts on acceptance, not on drawing. A bill 'after sight' gets grace; a bill 'at sight' does not.
Term in months: Count calendar months from the starting date, then add 3 days; Example: 10 Mar + 3 months = 10 Jun, then maturity is 13 Jun.
Holiday rule: If maturity date is a public holiday (including Sunday), due date = preceding business day; Exception: if it is an emergency holiday declared at short notice, or a day that becomes a holiday, the due date is the next following business day.
Days remaining in months: Jan 31, Feb 28 (29 in leap year), Mar 31, Apr 30, May 31, Jun 30, Jul 31, Aug 31, Sep 30, Oct 31, Nov 30, Dec 31; Use these for day-based terms.

How to solve Maturity Date, Days of Grace and Term of Bill questions

Use the same steps for any question on due date. Write each step on the rough sheet so you do not skip grace or the starting date.

1Find the starting date. For a bill after date, it is the date of drawing. For a bill after sight, it is the date of acceptance.
2Read the term. Note whether it is in days or months.
3If the term is in months, move forward by that many calendar months to the same day number. Adjust to the month end if the day does not exist.
4If the term is in days, count day by day from the next day after the starting date, using the correct days in each month.
5Add 3 days of grace to get the date of maturity. Skip this only if the bill is payable on demand or at sight (on presentation). A bill payable a period after sight gets grace.
6Check whether the date of maturity is a public holiday. If yes, move to the preceding business day. If it is an emergency holiday, move to the next following business day.
7Write the final date clearly and match it with the option.

Quickest way: Month-end counting shortcut

When to use it: Use this when a question gives a day-based term such as 60 or 90 days and you must choose among four dates.

Add the term and the 3 grace days first. For example, 60 days plus 3 gives 63 days in total.
Count the days left in the starting month. Subtract them from the total.
Subtract the days of each following month until the remainder is less than a month. That remainder is the day number.
Check the options. Often only one date fits the month, so you can eliminate the rest quickly.
Last, look for a Sunday or a named public holiday in the question. If the date falls on one, move to the preceding business day (for a Sunday, that is usually Saturday). Move forward only for an emergency holiday.

Common mistakes in Maturity Date, Days of Grace and Term of Bill

Forgetting to add 3 days of grace.
Students stop after finding the due date at the end of the term.
Fix: Make grace the last step of every calculation. Write +3 beside the term before you start.
Counting the starting date as day 1.
It feels natural to count today as the first day.
Fix: Exclude the date of drawing or acceptance. Count from the next day.
Using the drawing date for a bill after sight.
Students read only the drawing date given in the question.
Fix: For after sight, always use the date of acceptance. If acceptance date is not given, check whether the question says the bill was accepted on a later day.
Treating every month as 30 days.
Students use a 90-day shortcut for 3 months.
Fix: When the term is in months, count calendar months. Only use real month lengths when the term is in days.
Mixing up 'at sight' and 'after sight'.
The two phrases look alike, so students treat both the same way.
Fix: A bill payable on demand or at sight is due on presentation and gets no grace. A bill payable a stated period after sight gets 3 days of grace.
Moving to the next day when maturity falls on a holiday.
Students assume payment is simply delayed.
Fix: For an ordinary public holiday or Sunday, move to the preceding business day. Only an emergency holiday declared at short notice moves the date to the next following business day.

Worked examples

Example 1

A bill of exchange dated 10 March 2027 is drawn for 3 months after date. Find the date of maturity.

Show the solution

The bill is payable after date, so the starting date is 10 March 2027.
Add 3 calendar months: 10 March + 3 months = 10 June 2027. This is the due date.
Add 3 days of grace: 10 June + 3 days = 13 June 2027.

Answer: The date of maturity is 13 June 2027.

Example 2

A bill dated 20 January 2027 for ₹50,000 is payable 60 days after sight. The drawee accepts it on 25 January 2027. Find the date of maturity.

Show the solution

The bill is after sight, so the starting date is the date of acceptance, 25 January 2027.
Total days to count = 60 + 3 days of grace = 63 days.
Days left in January after 25 January = 31 - 25 = 6 days. Remaining = 63 - 6 = 57 days.
February 2027 has 28 days. Remaining = 57 - 28 = 29 days.
March has 31 days, so the remaining 29 days end on 29 March 2027.

Answer: The date of maturity is 29 March 2027.

Exam tips

Check first whether the question says after date or after sight. This one word decides the starting date.
Add the 3 days of grace in every time bill, including a bill payable a period after sight, unless the question says no grace.
Do not add grace to a bill payable on demand or at sight (on presentation).
For day-based terms, write the number of days in each month on rough paper before counting.
If the maturity date falls on a Sunday or public holiday, expect the answer to be the preceding business day, unless the question calls it an emergency holiday, in which case it is the next following business day.
Use the options. The month in the answer often removes two choices immediately.

Practice questions from Bills of Exchange

Maturity Date, Days of Grace and Term of Bill in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CA FoundationDue Date, Maturity and Calculation of Dates

Maturity Date, Days of Grace and Term of Bill: frequently asked questions

How do I calculate the due date of a bill of exchange?

Find the starting date, add the term, then add 3 days of grace. For a bill after date, start from the drawing date. For a bill after sight, start from the acceptance date.

What are days of grace in a bill of exchange?

Days of grace are 3 extra days allowed after the end of the stated term. The bill matures on the last of these days. They do not apply to bills payable on demand or at sight (on presentation), but they do apply to bills payable a stated period after sight.

What happens if the date of maturity is a holiday?

If it is a Sunday or an ordinary public holiday, the bill falls due on the preceding business day. If it is an emergency holiday declared at short notice, or a day that becomes a holiday, the bill falls due on the next following business day.

Is the date of drawing counted when finding maturity?

No. Leave out the starting day and count from the next day. For terms in months, move to the same day number in the later month.