Sinking Fund and Repair Fund in Your Society Bill: How They Are Calculated

Society bye-laws set a sinking fund of at least 0.25% and a repair fund of 0.75% of construction cost a year. How the numbers work and what to check in your maintenance bill.

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Most owners we manage for look at the total of their society bill and pay it. Two lines on that bill are worth understanding: the sinking fund and the repair and maintenance fund. They are your building's savings for major work.

The usual rates

Sinking fund: at least 0.25% of construction cost a year.
Repair and maintenance fund: 0.75% of construction cost a year.

The construction cost is certified by an architect. It is not the market value of your flat.

Both funds are worked out on construction cost certified by an architect, not on the market value of your flat.

A simple example

If the certified construction cost attributable to a flat is Rs 20 lakh:

Sinking fund: 0.25% × Rs 20 lakh = Rs 5,000 a year
Repair fund: 0.75% × Rs 20 lakh = Rs 15,000 a year

Your society may split this monthly or quarterly. How the cost base is apportioned (by area or per flat) depends on your bye-laws and general body decisions.

What these funds are for

Sinking fund: reconstruction, heavy structural repairs and major alterations.
Repair fund: regular repairs and upkeep of the building.

What is changing

Maharashtra's draft model bye-laws, discussed in August 2026, keep these minimums: 0.25% for the sinking fund and 0.75% for the repair fund. See what the draft bye-laws propose.

What to check as an owner

Ask for the architect's construction cost certificate if the numbers look off.
Check the audited accounts to see that the funds are invested separately.
If you rent out your flat, these charges usually stay with you as the owner unless your agreement says otherwise.

Frequently asked questions

How is the sinking fund calculated in a housing society?

At a minimum of 0.25% of the construction cost per year, as certified by an architect, under the model bye-laws.

What is the repair and maintenance fund rate?

Generally 0.75% of the construction cost per year.

Sources

This is general information, not legal or tax advice. Rules change, so check your own case with a lawyer or CA.

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Yanik

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