"Calculation of Rate of Interest on Society Maintenance Dues"

Calculation of Rate of Interest on Society Maintenance Dues

only Housing Society Maintenance Calculation,

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 does not pay the maintenance charges on time, Society can charge a 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 societies do not follow the Bye-Law for late payment. For example, some society charges fixed amounts like Rs 50 or Rs 100 on late payments which is wrong.
The reason behind that the committee is not aware of the MCS Act, rule, and Bye-Law, however, this is also the responsibility of their Auditor / CA / Accountants to suggest to 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 paid maintenance charges on 25-01-2021 in this case payment has been delayed 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 to 1200 + 7 = 1207

Case 2: Current month maintenance charge not paid

If he has not paid maintenance till next month's bill, this case his payment delayed 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, the Feb 2021 maintenance bill will come to 1200 + 10 = 1210
 
Case 3: Partial Payment

Now suppose the member has paid Rs 600 on/before 15-01-2021, so the 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 to 1200 + 5 = 1205

Method 2: Interest charge every month

This is an easy method so most of them follow this practice.
For Example, If a member has not paid their maintenance charge for April of Rs. 1000, and the due date is 20^th of every month, so in May month 21% annually means a 1.75% monthly late payment charge will be applicable on a Rs 1000, therefore 1.75% of Rs 1000 is Rs. 17.5 will be added in May Month Maintenance bill which becomes Rs 1017.5