Housing Society Compliance: GST & TDS

1. GST on Maintenance Charges

When is GST applicable? A housing society must register for and charge GST (18%) only if both of the following conditions are met:

• The total annual aggregate turnover of the society exceeds ₹20 Lakhs.
• The monthly maintenance contribution per flat/member exceeds ₹7,500 per month.

If the monthly charge is ₹8,000, GST of 18% is calculated on the entire amount (₹8,000), not just the excess ₹500. (MaintenancePay automatically calculates and generates GST-compliant invoices if enabled.)

2. TDS Deductions by Societies

Housing societies often hire contractors (security, housekeeping, lift maintenance). The RWA is responsible for deducting TDS (Tax Deducted at Source) under the Income Tax Act:

• Section 194C (Contracts): Deduct 1% (for individuals) or 2% (for companies) if a single contract exceeds ₹30,000, or total contracts in a year exceed ₹1,00,000.
• Section 194J (Professional Services): Deduct 10% for professional services like accounting, audits, or legal fees.

3. The Importance of Separate Sinking Funds

RWA bylaws mandate the creation of a Sinking Fund (for major repairs) and a Repair & Maintenance Fund (for routine fixes). Sinking funds must be maintained in a separate bank account or fixed deposit, and contributions are typically calculated at 0.25% of the construction cost of the flat per annum.