Your Flat Is Rented. Here's Every Rupee That Still Goes Out: Property Tax, Maintenance, Sinking Fund, Corpus and More

Every cost a Mumbai owner still pays once the flat is rented: BMC property tax, society maintenance, non-occupancy charges, sinking fund, corpus, fees and tax.

Lobby of Epsilon and Astron towers in Kandivali East with 2 and 3 BHK flats for rent and resale

"The flat is rented, so it pays for itself." I hear a version of this from almost every new owner. It's half true. Rent comes in every month, but a surprising amount still goes out, and if you only look at the rent figure you'll overestimate what the flat really earns.

Here is every outgoing I'd plan for on a rented flat in Mumbai, who usually pays it, and a worked example at the end.

1. BMC property tax

The owner pays this directly to the BMC. The society has no role in it: it isn't part of your maintenance bill, so it's easy to forget, especially from abroad. Property tax is based on the capital value of the flat, which is linked to ready reckoner rates. Bills rose about 15% on average from 2025-26 after capital values were revised, and flats up to 500 sq ft remain exempt under a 2022 state decision (The Realty Today). Here's how to pay BMC property tax online, step by step.

2. Society maintenance

Usually paid by the owner in Mumbai, unless your leave and licence agreement says the tenant pays it. It covers security, housekeeping, lifts, common electricity and water. If your monthly maintenance is above ₹7,500 and the society is large enough to be GST-registered, GST can apply on the whole amount, so look for that line too.

3. Non-occupancy charges

Societies charge this extra when the owner doesn't live in the flat. Under Maharashtra's new housing society rules it's capped at 10% of service charges, and late-payment interest on dues is capped at 12% a year. I explained the rules in this post.

4. Sinking fund and repair fund

Most cooperative societies collect a sinking fund (saved for major structural repairs) and a repairs and maintenance fund as part of the bill. These are owner costs, not tenant costs, because they protect the building you own.

5. Corpus fund and advance maintenance (new buildings)

In a new project, the developer usually collects a corpus fund and some months of advance maintenance at possession, before the society is formed. It's a one-time owner cost, but it's large, so budget for it when you plan to rent out a new flat.

Rent is what comes in. What the flat really earns is what's left after everything that still goes out.

6. Repairs and replacements

Geysers, ACs, plumbing, seepage after the monsoon, a coat of paint between tenants. Minor day-to-day upkeep is often the tenant's job under the agreement, but appliance and structural repairs are usually the owner's. I'd keep a repairs reserve every year.

7. Brokerage and agreement costs

In Mumbai, brokerage is commonly one month's rent, paid each time a new tenant comes in. The leave and licence agreement must be registered, and the stamp duty and registration costs are usually shared as the parties agree.

8. Property management fee

If you use a manager, the fee is usually a percentage of rent, plus 18% GST. I've broken that down in GST and TDS on property management fees.

9. Income tax and TDS

Rent is taxable. For NRI owners, the tenant deducts TDS at 31.2% on the gross rent, which is often more than the real tax. My post on filing an Indian return to claim back excess TDS explains why.

What does the tenant usually pay?

Electricity, piped gas, internet and minor day-to-day upkeep, plus any society charges the agreement specifically passes to them. Write it down clearly in the agreement; most disputes start where it's vague.

A worked example

Illustrative numbers for a 2 BHK rented at ₹60,000 a month. Your society's figures will differ.

Item	Per year
Rent received	₹7,20,000
Society maintenance (₹8,000 a month)	₹96,000
Non-occupancy charge (₹500 a month)	₹6,000
BMC property tax	₹25,000
Management fee at 7% of rent	₹50,400
GST on the fee at 18%	₹9,072
Brokerage (one month's rent, new tenant)	₹60,000
Repairs reserve	₹15,000
Total outgoings before income tax	₹2,61,472
Left before income tax	₹4,58,528

That's about 36% of the rent going out before income tax, in a year with a new tenant. In a year without brokerage, it's lower. Either way, knowing the real number helps you price the rent, plan repairs and decide whether to keep or sell.

How we help

For flats we manage, every outgoing is tracked against the property in the TND app, and maintenance work is paid through the TND Wallet to verified vendors at actual cost, with no markup. When an owner in Malad West asked why a repair bill was higher than expected, we sent a line-by-line breakdown; that's the standard we hold every bill to. See more on our Owners' Wall.

Frequently asked questions

Who pays society maintenance in a rented flat in Mumbai, owner or tenant?

Usually the owner, unless the leave and licence agreement says the tenant pays it.

How much can a society charge as non-occupancy charges?

Under Maharashtra's new rules, up to 10% of service charges.

Is property tax deductible from rental income?

Yes. Municipal property tax paid by the owner is deducted before the 30% standard deduction.

Who pays the sinking fund, owner or tenant?

The owner. It funds major repairs to the building.

Related reading

Want me to work out the real numbers on your flat? Book a call or message us on WhatsApp.

Warmly,
Yanik

General information, not tax or legal advice. Figures in the example are illustrative.

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