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Monday 27 June 2022

Calculation of Rate of Interest on Society Maintenance Dues

Interest on Cooperative Housing Society Dues | How to calculate interest on late payment?

The Member shall be required to pay their maintenance charges on time, if a Member do not pay the maintenance charges on time, Society can charge late payment fee on simple interest at 21% per annum as per Bye- Law No 71, or at such lower rate whatever fixed by the General Body, on the outstanding dues, from the date the amount was due as prescribed under Bye-Law No. 69, till full and final payment by the Member.

We have observed that many housing society do not follow the Bye-Law for late payment. For example some society charges fixed amount like Rs 50 or Rs 100 on late payment which is wrong.

Reason behind that committee is not aware of MCS Act, rule and Bye-Law, however this is also responsibility of their Auditor / CA / Accountants to suggest the society how to charge late payment on Maintenance Due as per Bye-Law.

Let us take an example

Bill Date: 01-01-2021 

Bill Due Date: 15-01-2021

Monthly Maintenance Charge: 1200

Method 1: Interest charge per day basis

Case 1: Maintenance Charges Paid After due date

Member has paid maintenance charges on 25-01-2021 in this case payment has delay by 10 days. Interest on maintenance due will be calculated as given below:

Interest on dues = 1200 * (21/100) * (10/365)

                          = 6.8 = 7 (Rounded Off)

So, Feb 2021 maintenance bill will come 1200 + 7 = 1207

Case 2: Current month maintenance charge not paid

If is he has not paid maintenance till next month bill, in this case his payment delay by 15 days. Interest on Cooperative Housing Society Dues will be as given below:

 Interest on dues = 1200 * (21/100) * (15/365)

                           = 10.3 = 10 (Rounded Off)

So, Feb 2021 maintenance bill will come 1200 + 10 = 1210


Case 3: Partial Payment

Now suppose member has paid on Rs 600 on / before 15-01-2021, so pending amount is Rs 600

Interest on dues = 600 * (21/100) * (15/365)

                          = 5.1 = 5 (Rounded Off)

So, Feb 2021 maintenance bill will come 1200 + 5 = 1205

Method 2: Interest charge on monthly basis

This is easy method so most of follow this practice.

For Example If member has not paid their maintenance charge of Month of April Rs. 1000, and due date is 20th of every monthly, so in May month 21% annual mean 1.75% monthly late payment charge will be applicable on Rs 1000, therefore 1.75% of Rs 1000 is Rs. 17.5 will be added in May Month Maintenance bill which become Rs 1017.5

How to calculate interest on late payment PDF

Late payment calculation in maintenance charges | Calculation of Rate of Interest on Society Dues | Co-operative Society - charging of interest on interest

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