"Why is my maintenance ₹4,800 when my neighbour pays ₹3,200?" Almost every committee hears some version of this. The answer is usually in how the society splits its costs — and few residents have ever had it explained.

This guide covers how Indian housing societies and RWAs typically calculate monthly maintenance, what goes into the budget, and where GST comes in. Rules differ by state and by society, so treat it as a starting point and check your bye-laws, your state's co-operative or apartment ownership law, and a chartered accountant for anything tax-related.

Start with the budget, not the rate

Maintenance is not a price the committee picks. It's the society's expected annual spending, divided among members according to an agreed method. So the first step is always the budget.

Typical heads of expense include:

Security — guards or the security agency contract
Housekeeping — cleaning staff, consumables
Common electricity — corridors, lifts, pumps, street lights, clubhouse
Water — municipal charges, tanker water, water treatment
Lift maintenance — annual maintenance contracts (AMCs) and repairs
Power backup — generator diesel, servicing
Repairs and upkeep — plumbing, electrical, painting, waterproofing
Gardening and pest control
Staff salaries — manager, plumber, electrician
Insurance for the building
Administrative costs — audit fees, software, bank charges, stationery
Contributions to funds — sinking fund and repair fund (more on those below)

Add these up for the year, and you have the amount the society needs to collect. The question is how to divide it.

The three common methods

1. Per square foot

The most widely used method. Each flat pays a fixed rate multiplied by its area.

Monthly maintenance = rate per sq ft × area of the flat

For example, at an illustrative rate of ₹3 per sq ft, a 1,000 sq ft flat pays ₹3,000 a month and a 1,500 sq ft flat pays ₹4,500.

The logic is that bigger flats tend to use more of the shared resources and have higher property values. The obvious objection is that a three-bedroom flat doesn't use three times the security or lift that a one-bedroom does.

Which area? This matters more than people realise. Carpet area (the usable floor area inside the walls) is smaller than built-up area, which is smaller than super built-up area (which includes a share of common areas). The same rate applied to different area definitions gives very different bills. Your bye-laws or the general body's resolution should say which area is used — and it should be applied the same way to every flat.

2. Equal share

The total is divided equally among all flats, regardless of size. It's simple and easy to explain, and it reflects the fact that many services — security at the gate, a lift ride, the guard's salary — are used roughly equally by every household.

Owners of smaller flats often feel this is unfair, because they pay the same as a penthouse.

3. Hybrid

Many societies split the budget: services that every flat uses roughly equally (security, housekeeping, staff salaries) are shared equally, while costs that scale with size or value (some repairs, insurance, sinking fund) are charged per square foot.

Monthly maintenance = equal share of service costs + (rate per sq ft × area)

It takes a little more explaining, but it tends to produce the fewest arguments.

Usage-based charges

Some costs are best charged by actual use rather than folded into maintenance:

Water, where individual meters exist
Parking, per allotted slot
Amenity bookings such as the party hall, per booking

Charging these separately keeps the base maintenance fairer for residents who don't use them.

Sinking fund and repair fund

Beyond day-to-day costs, a well-run society sets money aside for big future expenses: structural repairs, repainting, lift replacement, waterproofing.

A sinking fund builds up over years for major repairs or reconstruction.
A repair and maintenance fund covers large periodic work.

How much to set aside depends on your state's rules and your bye-laws. In Maharashtra, for example, the model bye-laws for co-operative housing societies set the sinking fund contribution at a minimum of 0.25% of the building's construction cost per year, and a repairs and maintenance fund of 0.75% of construction cost per year. Other states and other kinds of associations follow different rules, so check yours.

Societies that skip these contributions to keep monthly maintenance low usually end up with a large special levy later — which is much harder to collect.

Non-occupancy charges

Some societies charge extra to owners who rent out their flats, to reflect the additional administrative load. Where this is allowed, it is usually capped: in Maharashtra, co-operative housing societies can charge non-occupancy charges of up to 10% of the service charges. Check your state's rules before introducing one.

When does GST apply to maintenance?

This is one of the most misunderstood parts of society finances. In broad terms, under the clarification issued by the CBIC in 2019 (Circular No. 109/28/2019-GST):

A housing society or RWA must register for GST only if its aggregate annual turnover exceeds ₹20 lakh.
Even for a registered society, a member's contribution is exempt if it is up to ₹7,500 per month per member (for each residential apartment).
If the monthly contribution exceeds ₹7,500, GST at 18% applies to the entire amount, not just the part above ₹7,500.

There are further nuances — for example, how amounts like property tax or electricity charges collected on behalf of authorities are treated. GST rules change, so confirm the current position with a chartered accountant before billing.

A worked example (illustrative)

Imagine a 100-flat society with an annual budget of ₹36,00,000, of which ₹24,00,000 is security, housekeeping and staff (shared equally) and ₹12,00,000 is repairs, insurance and fund contributions (shared by area). The total area across all flats is 1,20,000 sq ft.

Equal part: ₹24,00,000 ÷ 100 flats ÷ 12 months = ₹2,000 per flat per month
Area part: ₹12,00,000 ÷ 1,20,000 sq ft ÷ 12 months = ₹0.83 per sq ft per month

So a 1,000 sq ft flat pays about ₹2,000 + ₹833 = ₹2,833, and a 1,600 sq ft flat pays about ₹2,000 + ₹1,333 = ₹3,333.

These numbers are made up to show the arithmetic. Your budget, area definition and split will be different.

Making the calculation transparent

Most disputes about maintenance aren't about the amount — they're about not understanding it. A few habits help:

Publish the budget before the financial year, with each head of expense.
Explain the method (per sq ft, equal or hybrid) and the area definition, and get it approved by the general body.
Show the breakdown on every bill, not just a total.
Report actual spending against the budget during the year, not just at the AGM.

When residents can see where their money goes, collection gets easier. If you're dealing with flats that still don't pay, read our guide to collecting maintenance dues from defaulters.

How Community Hub helps

Community Hub lets your committee raise monthly maintenance and ad-hoc charges with a line-item breakdown residents can see in the app, collect payments through Razorpay (UPI, cards, net banking), issue invoices and receipts, remind overdue flats automatically and track expenses alongside collections. See maintenance collection for details. New communities get a 3-month trial and free data migration.

Download Community Hub on the App Store · Get it on Google Play

About the author

Written by the Community Hub team at TERRAPIRE Solutions in Hyderabad. This article is general information, not legal or tax advice. Rules vary by state and change over time; check your bye-laws and consult a chartered accountant.

How Society Maintenance Charges Are Calculated in India