Interest on maintenance arrears calculator
Enter the outstanding principal, the rate your bye-laws permit and the days overdue. The calculator returns the interest, the total now due, and how fast it is accruing.
Most bye-laws specify simple interest. Only choose compound if yours expressly provides for it.
Indicative only. The rate your society may charge is set by its registered bye-laws and any general body resolution made under them — confirm both before raising a demand.
Interest on maintenance arrears is calculated as outstanding principal × annual rate × days outstanding ÷ 365. Most society bye-laws specify simple interest and cap the rate — commonly at 21% per annum — charged on the principal rather than on accrued interest.
How the calculation works
One formula, and three constraints that decide whether the resulting demand is enforceable.
The formula: Interest = Outstanding × Rate × Days ÷ 365
Interest accrues daily on the amount outstanding. A ₹24,000 balance at 21% per annum for 182 days is 24,000 × 0.21 × 182 ÷ 365 = ₹2,513. Because it accrues daily rather than in monthly steps, the figure keeps rising until the balance is cleared — which is the behaviour that makes interest a more effective deterrent than a flat late fee.
Simple interest means the rate applies to the original principal throughout. Compound interest applies it to principal plus accrued interest, producing a materially larger figure over time. Most registered bye-laws specify simple, and charging compound where the bye-laws say simple is one of the more common grounds on which a demand is successfully challenged.
Inputs you will need
Take the outstanding principal only — the maintenance due, excluding any interest already added. Charging interest on accrued interest is compounding by another name, and it needs express authority in the bye-laws.
Count days from the day after the due date, less any grace period the bye-laws grant and any period covered by an amnesty the general body has resolved. The rate comes from the registered bye-laws or a valid general body resolution made under them, not from what the previous committee happened to charge.
- Outstanding principal. Excluding interest already accrued.
- Days outstanding. From the day after the due date, less grace and any amnesty.
- The rate and its basis. From the bye-laws, with the resolution that authorised it.
Worked example: ₹24,000 outstanding at 21 per cent for 6 months
The six-month figure at 21% is ₹2,513. The table shows how the same balance accrues at other rates and over longer periods.
| Period outstanding | At 21% p.a. | At 18% p.a. | At 12% p.a. |
|---|---|---|---|
| 30 days | ₹414 | ₹355 | ₹237 |
| 90 days | ₹1,243 | ₹1,065 | ₹710 |
| 182 days | ₹2,513 | ₹2,154 | ₹1,436 |
| 365 days | ₹5,040 | ₹4,320 | ₹2,880 |
| 730 days | ₹10,080 | ₹8,640 | ₹5,760 |
The 21 per cent rule and what your bye-laws say
The figure most often quoted is a ceiling of 21% per annum simple interest, which appears in the model bye-laws several states have issued and has been widely adopted. It is a maximum rather than a default: a society may resolve a lower rate, and many do.
Three constraints matter more than the headline rate. The charge must be authorised by the registered bye-laws or a general body resolution made under them — a committee cannot introduce interest on its own authority. It must be simple rather than compound unless the bye-laws expressly provide otherwise. And it must be applied to every member in the same position, because selective enforcement is the defence that most reliably defeats a recovery action.
Keep the authority and the computation together. When a member disputes a charge, what resolves it is the resolution that set the rate, the date it took effect, and a statement showing exactly how the figure was derived. A demand that cannot be explained line by line is one committees usually end up waiving.
- 21% p.a. is a common ceiling, not a rule. Check your registered bye-laws for the binding figure.
- Simple, not compound. Unless the bye-laws expressly say otherwise.
- On principal, not on accrued interest. A frequent and fatal error.
- Applied uniformly. Selective interest undermines the whole demand.