Sinking fund calculator
Enter the construction cost, the flat count and the rate. The calculator returns the per-flat monthly contribution and what the fund reaches over the period you choose.
The 0.25% minimum comes from the Maharashtra model bye-laws and is applied to construction cost excluding land. Other states prescribe their own rate — check your registered bye-laws for the figure that binds your society. Accumulation shown before any investment return.
A sinking fund contribution is calculated as construction cost × the rate per annum set by the bye-laws, excluding the cost of land. The Maharashtra model bye-laws prescribe a minimum of 0.25% per annum; other states set their own figure.
How the calculation works
The percentage is easy. Establishing the base is where societies go wrong.
The formula: Contribution = Construction cost × Rate per annum
A society with ₹12 crore of construction cost contributing at 0.25% collects ₹3,00,000 a year. Across 100 flats that is ₹3,000 per flat per year, or ₹250 a month. Over twenty years the fund reaches ₹60,00,000 before any investment return.
The rate is a minimum in the bye-laws that prescribe it, not a target. A general body may resolve more, and for an ageing building or one in a coastal environment where deterioration is faster, it generally should.
Inputs you will need
Construction cost excluding land. This is the input most often got wrong, because market value and purchase price both exceed it substantially in Indian cities — applying the percentage to a purchase price produces a figure many times the prescribed minimum. For older buildings where the original cost is unavailable, it is usually established by a valuer or by reference to prevailing construction rates.
The flat count for the per-flat share, and the rate from your registered bye-laws. Where flats differ materially in size the contribution is normally apportioned by area rather than equally, so the per-flat figure here is an average.
- Construction cost, excluding land. Not market value and not purchase price.
- The rate from your bye-laws. 0.25% is a Maharashtra minimum, not a national rule.
- Flat count or total area. Apportionment is usually by area where sizes vary.
Worked example: a 100-flat society with ₹12 crore construction cost
At the 0.25% minimum the fund reaches ₹60 lakh in twenty years. Whether that is adequate for the structural work a thirty-year-old building needs is the question worth putting to the general body.
| Rate | Annual collection | Per flat per month | After 20 years | After 30 years |
|---|---|---|---|---|
| 0.25% (minimum) | ₹3,00,000 | ₹250 | ₹60,00,000 | ₹90,00,000 |
| 0.50% | ₹6,00,000 | ₹500 | ₹1.20 cr | ₹1.80 cr |
| 0.75% | ₹9,00,000 | ₹750 | ₹1.80 cr | ₹2.70 cr |
| 1.00% | ₹12,00,000 | ₹1,000 | ₹2.40 cr | ₹3.60 cr |
Minimum rules and what the fund can pay for
The 0.25% per annum figure comes from the Maharashtra model bye-laws and is applied to the construction cost of each flat excluding land. It is the most widely quoted figure in India and it is not a national rule — societies registered under other state Acts should check their own registered bye-laws for the rate that binds them.
The fund is for major structural work: reconstruction, substantial structural repair and strengthening, and end-of-life replacement of major building elements. It is not for routine and planned maintenance — painting, minor plumbing renewal, gardening and ordinary repairs belong to the repair and maintenance fund and to the annual budget. Funding routine repainting from the sinking fund is spending the structural reserve on housekeeping, and the temptation to blur the line is constant.
Drawing on the fund generally requires general body approval, and the majority required is set by the bye-laws. Where a case genuinely sits between the two funds — replacing a lift at end of life, waterproofing an entire terrace — take that approval expressly rather than deciding at committee level. The approval is what protects the committee later.
- 0.25% is a Maharashtra minimum. Check your own registered bye-laws.
- Structural work only. Routine repair belongs to the repair fund.
- Approval is generally required to draw on it. At the majority the bye-laws prescribe.
- Hold it as a distinct ledger account. A fund whose balance cannot be stated gets qualified.