This Presentation is from Workshop for Treasurers conducted by ApartmentADDA in Chennai. It presents ApartmentADDA's learnings from hosting 3000+ Apartment Complexes in India. In particular learning from some of the best maintained Societies in Mumbai. It covers • Maintenance Bill Structure (Bill Frequency, Sq.Ft. Rate vs. Flat Rate, Bill Heads) • Service Tax • 5 Myths in Society Accounting • Accounting Activities in Society Accounting. One of the learnings was from Brigade Metropolis- a 1600 apartments community which served as a great case study of Treasurers with no prior knowledge of Accounting or Financial Governance, doing a great job adding Value to their Public Funds, with their Personal Commitment and a Transparent System. To get more insights check here, http://apartmentadda.com/blog/blog/2013/10/11/workshop-for-treasurers-2/

1. Presenter: San Banerjee. Co-Founder, ApartmentADDA.com

2. EXPENSE
budget Purchase Request
Purchase Order
Vouch
er
VarianceTDS
Write-Off
Form-16
Petty Cash
INCOME
Refundable Deposits
Credit Note
Suspense
Service Tax
Defaulters
Income Tax
BANK
RECONCILIATION
Book Balance
Bank Balance
Reconciled
UnReconciled
Credit
BALANCE SHEET
General LEDGER
Income
Deb
it
Assets
Service Tax
Trial Balance
Journal Entrie
Liabilities
Goals of Workshop:
1. Simplifying Society Accounting
2. Sharing known Standards
3. Sharing of Best Practices by Treasurers

3. Frequently Used Terms in this Workshop
• Society = Association = RWA = AOA = HOA
• Members = Owners. (Tenants are Associate Members)
• MC = Management Committee
• GB = General Body = All Members
• Treasurer = Person End Responsible for the Society Accounts
• Non-Members = Advertisers/External Payers

4. When Association is Formed.
Bank Account of Society created
Pre-Formation Contribution
from Members
Corpus Fund from Builder

5. MC Faced with Structuring Bill.
At What Frequency should the
Maintenance Billing be?
What Structure should the Bill have?
How to map Expenses to the
Collections?
Sq.Ft. Rate or Flat Rate?

6. Bill Structure Must Consider Below
• What Expenses will the Apartment Complex incur in its
lifetime.
• Based on Sq.Ft. Rate or Flat Rate
• Representation of Collection Heads to insulate against
Taxation vagaries.

7. Deep Dive into the Maintenance Bill
Mind Map

16. Myth #1
Association should not keep any Excess Fund at the end of Year.
Any Excess must be refunded to Members.
Reserve Funds are a Must for the Association.
Mutuality Principle protects against Income Tax.
Reality

17. Myth #2
If the Association keeps FD in a Cooperative Bank, there is no Tax
on the Interest.
Only if the Association and the Cooperative Bank are part of a
common Association!
Reality

18. Myth #3
An Owner can 'Choose' to not be a Member of the Association.
Apartment Owners Association is a statutory Body. Every Owner
Member by Default. Must also be part of Sale Deed.
Reality

19. Myth #4
Tenants can not be charged differently from Owners.
Service Charges of an Association will be higher when Flats are
occupied by Tenants instead of Owners.
Reality

20. Myth #5
The only way to Augment Revenue is Interest from Fixed
Deposits.
Major inherent revenue earning potential of Associations.
Reality

21. Deep Dive into the Service Tax Issue

22. Clarity on Service Tax
• Collection of Service Tax to be levied if:
• Association qualifies (Income > Rs.10L/Year) AND
• Member qualifies (Collection>Rs.5000/Mo)
• If Collection > Rs.5000/Mo, FULL Collection Amount of the
Member is Service Taxable.
• Service Tax applicable only to Specific Members who qualify
not to all members.

23. LACK of Clarity on Service Tax
• Taxable Services?
• When is Association a Pure Agent
Contradictions: Collection for Individual Electricity Bill, vs. Collection for
Property Tax.

24. Not Liable in absence of Service
Component
Not Liable as it is
a part of
Exempted
Services
Liable To Service Tax Where not all
transactions are liable
Property Tax Water Charges Service Charges Renting of Hall
Repairs & Maintenance Fund Solid Waste
Management
Parking Charges Renting for Religious
Function
Major Repairs & Maintenance
Fund
Insurance Charges Non-Occupancy Charges Renting of Room
Sinking Fund Electricity
Expenses
Transfer Fees Sponsorship/Advt
Interest Cultural Expenses Hoardings/Tower
Penalty Parking Charges
Non-Agriculture Tax Entrance fees
Education & Training Fund Club house
Election Fund
Taxable Services (courtesy: ApartmentADDA partners dalalca.com)

25. Association Accounting - Best Practices
#1 Say No to Cash Collections
#2 Deduct TDS where relevant
#3 One Account for Collection, Multiple to Hold Funds
#4 Perform Bank Reconciliation Regularly
#5 Obtain Audit Supervision as early as possible

26. Regular Accounting Activities
Daily Monthly Quarterly Yearly
Activity
1. Enter
Maintenance
Bills, Vendor
Invoices.
2. Enter
Cheques
Collected &
Paid.
1. Bank
Reconciliation
2. Cash
Reconciliation
3. Pay TDS
4. Pay Service
Tax
1. File TDS
Return
2. File
Service Tax
Return (Half
Yearly)
1. Audit
2. Adjustment
Entries
3. IT Return
Filing
4. RoS Filing
Person
Involved
Data
Entry/Accountan
t
Data
Entry/Account
ant +
Treasurer
Data
Entry/Accou
ntant
Data
Entry/Accountan
t + Treasurer+
Auditor

27. Statutory Audit - What happens
• Review Bank Reconciliation
• Review Accounting Journal Entries
• Review Tax Collection, Remittance & Filing
• Post Asset Depreciation
• Post Accrued Interest from Bank FDs.
• Post Provisions and other Adjustment Entries

28. Financial Statements
• To Registrar of Societies
• Balance Sheet
• Income Expense Report
• Asset Register, Member Register, Office Bearers
Register, Bye-Laws
• To Members
• Account Statement of the Flat
• Members who are in Default
• Members who have paid in Advance
• Vendors who are yet to be Paid

29. THANK YOU!
Get an ADDA – India’s #1 Portal for Society Accounting!
www.apartmentadda.com
99876-33345 (San)
@sanban
@apartmentadda