How is Interest Calculated on Society Maintenance Charges?

There is a common question regarding the interest on society maintenance charges that I came across recently. Simple interest is commonly used to compute interest on outstanding society maintenance payments. As per Bye‑Law 71, societies in India typically charge simple interest at 21% per annum.

What is Interest on Late Payment of Society Maintenance?

21% unless a lower rate is decided by a general meeting to recover maintenance dues from defaulters. Interest is calculated using the formula:

Interest = Outstanding Dues × (Rate of Interest) × (Number of Days Delayed / 365)

For example, if a flat owner owes Rs 1,000 and pays 15 days late, the interest would be calculated as: Rs 1,000 × (21/100) × (15/365) = Rs 8.63, rounded to Rs 9. That Rs 9 is then added to the next month’s maintenance, making the total Rs 1,009.

If the dues remain unpaid for an entire month (say, 20 days), the interest becomes Rs 1000 × 0.21 × (20/365) = Rs 11.50, rounded to Rs 12, so the next bill would be Rs 2,012 (Rs 1,000 for April + Rs 12 interest + Rs 1,000 for May).

In cases of partial payment, interest is only charged on the outstanding balance for the delayed period. I hope you found this helpful.

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There is a common question regarding the interest on society maintenance charges that I came across recently. Simple interest is commonly used to compute interest on outstanding society maintenance payments. As per Bye‑Law 71, societies in India typically charge simple interest at 21% per annum.

What is Interest on Late Payment of Society Maintenance?

21% unless a lower rate is decided by a general meeting to recover maintenance dues from defaulters. Interest is calculated using the formula:

Interest = Outstanding Dues × (Rate of Interest) × (Number of Days Delayed / 365)

For example, if a flat owner owes Rs 1,000 and pays 15 days late, the interest would be calculated as: Rs 1,000 × (21/100) × (15/365) = Rs 8.63, rounded to Rs 9. That Rs 9 is then added to the next month’s maintenance, making the total Rs 1,009.

If the dues remain unpaid for an entire month (say, 20 days), the interest becomes Rs 1000 × 0.21 × (20/365) = Rs 11.50, rounded to Rs 12, so the next bill would be Rs 2,012 (Rs 1,000 for April + Rs 12 interest + Rs 1,000 for May).

In cases of partial payment, interest is only charged on the outstanding balance for the delayed period. I hope you found this helpful.

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According to Bye Law No. 71, members must pay simple interest in their outstanding debts to the Society at a rate of 21% annually, or at a lesser rate that the General Body may determine. However, the query still needs to be answered: how is interest calculated on society maintenance charges? So, for that, I have shared the formula below.

How to Find Interest Charges in Housing Society Maintenance?

The maximum interest rate allowed is 21% per annum, as per the Maharashtra Cooperative Societies Act, 1960, but most societies charge between 12% and 18% per annum. Interest is usually charged on a monthly compounded basis of the overdue amount.

Interest = (Outstanding Dues × Interest Rate/100×Days of Delay/365)

Let’s understand it with an example:

1. Maintenance Due: Rs.10,000

2. Interest Rate: 18% per annum

3. Days Delayed: 60 days

Interest = (10,000×18100×60/365) = Rs.295.89

Thus, the total payable amount would be Rs.10,295.89 after 60 days.

Each society has its own interest policy within legal limits. I hope you found this helpful.

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