Tag Archives: Accounting of housing Society

Sinking Fund for housing Society

Sinking Fund Housing Society – Why Society Need It?

Sinking Fund Housing Society – Why Society Need It?

It is risky to continue occupation of a building which has run its life. A provision has been made in the byelaws, enabling a co-operative housing society to collect contributions towards a sinking fund from members at a fixed rate per month. The rate fixed under the bye-laws is 1/2 per cent per annum of the cost of construction of a flat, payable in equal monthly instalments, as provided under bye-law No. 67(b)(i) of the bye-laws from the set revised in 1976. A building sinks in course of time due to its wear and tear but the land remains as it is even if the building collapses.

The basis on which the cost of construction of tenanted structures should be fixed: There are some cases which pose problems to societies in adopting the basis for the purpose of fixing the amounts of contributions from members towards the Sinking Fund. There may be societies which have newly constructed buildings as also old tenanted structures, the tenants of which have joined the structures.

There may be some other societies, in which new flats are constructed over the old tenanted structures and tenants thereof have joined the societies. The cost of these old structures is much less than that the cost of construction of the new flats and the contributions from the members of the tenanted structures based on such cost are practically negligible.

A society having a separate old structure on a part of the plot on which a new building is constructed, should ascertain from an architect the future life of the structure and fix the amount of contribution from each member, taking into consideration the cost of reconstruction of a new building thereon, of equal size, if the tenants do not desire new accommodation of large size, at the time when the structure would become due for reconstruction, the area of each flat and the accumulation of the amount of contribution to the sinking fund invested in long term deposit along with interest at the time of starting reconstruction of the structure.

In the latter case, the members of the tenanted structure, on which new flats are constructed have to bear in mind that the reconstruction of the building would include the reconstruction of the structure.

The rate per sq. ft. of reconstruction of the flats is bound to be uniform for all flats. It, therefore, follows that the value of the old structure, for the purpose of fixing the amount of contribution to the sinking fund should be based on the rate per sq. ft. of construction of new flats on the old structure. This would enable the society to build up its sinking fund equal to the cost of reconstruction of the building in course of time.

Source: Times Of India (Link)

Annual General Meeting Housing Society AGM

How To Conduct AGM of Housing Society In Maharashtra

How To Conduct AGM of Housing Society In Maharashtra
The bye-laws in Maharashtra prescribe rules for the deadline for holding AGMs, the quorum for such meetings and the business that can be transacted, as well as penalties for members who fail to attend

Every housing society has to adopt bye-laws, for its management and administration. The government of Maharashtra has provided model bye-laws, which can be adopted with or without changes by societies. These bye-laws also cover the rules pertaining to annual general body meetings of the societies.

Time limit for holding the AGM and minimum notice period

As per the model bye-laws for cooperative housing societies in Maharashtra, every housing society has to hold an annual general meeting (AGM) of the society, every year, before 30th September. It is the responsibility of the committee of the housing society, to ensure that the AGM is held within the prescribed period. The notice for convening the AGM, has to be signed by the secretary of the society. The AGM of the society cannot be convened unless a notice of 14 days is given to the members. While computing the 14 days, the date on which the notice is issued and the date of the meeting shall be excluded. Once an AGM is called, it cannot be treated as invalid, unless an order declaring the meeting as such is passed by the cooperative court.

Quorum for AGM

For conducting the business at the AGM, the law stipulates that a minimum number of members need to be present, called the ‘quorum’ of the meeting. A minimum of two-thirds of the total number of members, subject to a maximum of 20, should be present to constitute the quorum for the AGM. Consequently, small societies sometimes find it difficult to ensure the quorum. For big societies, even a small proportion of the total members may add up to 20 members being present in the meeting and constitute a quorum. In case the required quorum is not present within half an hour of the appointed time, the meeting shall be adjourned to a later hour on the same day or to a subsequent date which cannot be earlier than seven days and not later than 30 days from the original date of the AGM. At the adjourned meeting, there is no requirement to have a quorum. However, the mere attendance of one person at the adjourned meeting, shall still not constitute a meeting and therefore, a minimum of two members have to be present even at the adjourned meeting.

Business to be transacted at the AGM

“The main purpose of the AGM of a society, is to adopt and approve the annual accounts of the society by the members and to receive an annual report of the affairs of the society. The auditors of the society are also appointed at the AGM. In addition to the above business, the AGM can take up any other matter, even if the same is not included in the notice.”

However, the members cannot take up any of the following business at the AGM, unless proper notice has been given:

  1. Expulsion of members of the society
  2. Amendment of the bye-laws of the society
  3. Bifurcation, amalgamation, or division of the society
  4. Transfer of property of the society

If the business on the agenda of the general meeting of the society is only partly transacted, then, the meeting can be postponed to any other date decided by the members present in the meeting, which should not be later than 30 days from the original AGM.

What happens if a member does not attend the AGM

If a member does not attend a single general meeting in five years, without the consent of the general body of the society, then s/he will become a non-active member. A non-active member, who does not attend even a single meeting in the next five years becomes liable for expulsion from the society. Moreover, a non-active member does not have the right to participate in the business of the AGM.

Source: Housing.com (Link)

NOC for Society

Understanding Tenant Agreement Housing Society or RWA

Understanding Tenant Agreement Housing Society or RWA

Rental agreements are more or less similar all over the country. It mentions various terms of the agreement, which include:

* Amount of rent to be paid every month

* The amount of safety deposit to be paid to the owner on a return basis

* Period of rental agreement

* Number of people occupying the property

* Type of lease – residential or commercial

* Maintenance issues – who will pay the monthly maintenance bills (in case of a property in a housing society), minor repair work charges, major repair work charges and so on

* Termination of lease rules

The rental agreement in India has been designed well to protect the rights of both the lessor and the lessee. Other clauses may be added in the agreement as per the discussions between the two parties.

Lease Agreements & Deposit

Apart from being drawn up for commercial and residential purposes, there are three types of rental agreements based on the duration of the lease:

* Week to week

* Month to month

* A fixed term, not be less than six months or more than 12 months.

The duration of the notice period prior to the termination of the lease depends on the period of the agreement. Once signed, the landlord needs to give the tenant a duplicate copy of the agreement within 10 days of signing or the tenant may withhold the rent till they receive the copy.

The safety deposit amount to be paid for the duration of the lease may be negotiated. Technically, the safety deposit amount is calculated as the first three months rent which is fully refundable subject after the amount of repair and maintenance deductions the landlord has to make. In practice, however, if the landlord is charging a higher amount of deposit, then the rent amount will be lower and vice versa. The deposit amount has to be refunded within a month or the tenant may charge an interest on the amount that is computed on a daily basis.

The Tenant’s Rights

The Indian rental agreement provides ample security to the tenants. Once the tenancy commences, landlord is not allowed to infringe upon the tenant’s privacy. Although, periodic checks of the property are done to check on the maintenance, the landlord has to give prior information before coming or sending their representatives.

The tenant may also ask for repair work or some other changes to be made to the property if they feel it is absolutely necessary. For instance, a tenant may request installing a grill on the balcony or terrace for child proofing.

The Landlord’s Rights

The landlord holds the right to evict the tenants under strict circumstances if they violate any of the terms of the rental agreement. However, a prior notice of at least three weeks has to be served. Also, if the tenant terminates the lease agreement without prior intimation, the landlord has the right to withhold the full security deposit amount.

Extensions

The rental agreement in India is drawn for a period of 11 months. If both the parties want to extend the lease, a new pact must be drawn a month prior to the expiry of the agreement. Further, the landlord is allowed to impose a 10 per cent raise in rent, which means:

* In accordance with the new rent amount, the security deposit amount may also be raised.

* The duration of the rental agreement may be revised.

The rest of the terms and condition will remain the same if both the parties are satisfied and a few additional clauses may be added as per their discussion.

Legal Issues

If the agreement is not honoured by either party, they are free to take legal recourse. The rental agreement has been made flexible so that neither party may be tied down by pre-defined rules in case of exceptional circumstances. The Indian tenancy laws are strict; however, the legal procedure is long and time consuming.

A part of the problem in the system also arises from the subjectivity in the agreement that does not define the terms and conditions very clearly. When an agreement drawn concisely, the tenant and landlord benefit equally.

Source: The Indian Express (Link)

Income Tax on Housing Society

Income Tax On Housing Society

Income Tax On Housing Society

The general perception of the Managing Committee of a cooperative housing society is that the income generated by the society is not chargeable to tax and therefore do not bother to file Annual Tax Return. This is a wrong perception since though certain types of income of cooperative housing society are fully exempted there are other incomes which are chargeable to tax.

The society’s income is generated by the following charges:
(1) Contribution from Members:
This is the most common charges the society collects from its members to run the day to day affairs of the society. They are credited under different heads namely, maintenance, municipal taxes, electricity, lift maintenance, housekeeping, water charges, repair funds, sinking fund. etc. Any surplus generated due to these types of income is not chargeable to tax as its exempted based on the “Concept of Mutuality”

(2) Interest charged on member outstanding dues:
Interest charged by the society on outstanding dues again forms a part of contribution and qualifies the test of concept of mutuality and is exempted.
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NOC for Society

GR for Non Occupancy Charges for premises co-operative housing society

Non Occupancy Charges for housing society

NOC Charges-page-001 NOC Charges-page-002

Ref-housingsocietymaharashtra.blogspot.in

मेंटेनन्सबुडव्यांवर कारवाईचे सोसायट्यांना अधिकार

म. टा. प्रतिनिधी, मुंबई

सहकारी गृहनिर्माण संस्थांतील सदस्य मेंटेनन्सचा खर्च अथवा सोसायटीचे वीज बिल भरीत नसेल तर अशांविरुद्ध संबंधित थकबाकीदारांकडून वसुली करण्याचे अधिकार यापुढे सहकारी गृहनिर्माण संस्थांना मिळणार आहे, अशी माहिती सहकारमंत्री हर्षवर्धन पाटील यांनी दिली. यामुळे मुंबईसह राज्यातील विविध सहकारी गृहनिर्माण संस्थांतील नाठाळ सदस्यांवर सहकारी कायद्यातील कलम १०१नुसार थकबाकी वसुलीचे थेट अधिकार भविष्यात मिळणार असल्याने या संस्थांना दिलासा मिळण्याची शक्यता आहे. Continue reading

स्टॅम्प ड्युटीचा भार हलका

बड्या कॉम्प्लेक्समधील रिकामे फ्लॅट आणि विकासकाकडून देण्यात येणाऱ्या विविध सोयीसुविधांवर भराव्या लागणाऱ्या लाखो रुपयांच्या अनावश्यक स्टॅम्प ड्युटीतून हाऊसिंग सोसायट्यांची अखेर सुटका झाली आहे. अनेक वर्षांपासून होणाऱ्या या मागणीची राज्य सरकारने दखल घेतली असून या निर्णयामुळे हजारो सोसायट्यांना मोठा दिलासा मिळाला आहे.
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TDS payment for Housing Society

TDS for Housing Society

TDS for Housing Society

On registration of housing society, the society gets the status of legal entity.
Under the Income Tax Act 1961, a Cooperative Housing Society is taxable entity.
It is mandatory for any legal entities to file TDS return and Income tax returns
thus it is also obligatory to all housing societies to deduct and file TDS Deducted.

What is Tax Deducted at Source (TDS)?

TDS is a certain percentage of payment which is deducted at the time of payment
made to the party, who can be a contractor or professional. TDS is deducted
after considering the amount of payment is made in his favour by the society.
Such deducted payment is paid to the Government account by the society.
The society deducting the tax is called Deductor and the person or company
whose tax is deducted is called Deductee.

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