Ways a housing society can earn (and keep it on record)
Maintenance isn't the only money a society can raise. Many societies earn from things they already have — a hall, a terrace, a notice board, even their waste — and every rupee earned is a rupee less that members have to pay. Here is how to do it properly.
Six ideas that already work
- Sell dry waste and scrap. Newspapers, cardboard, plastic and metal fetch money from a scrap dealer or authorised recycler. Segregating waste is required anyway under the Solid Waste Management Rules, 2016. Weigh it with a committee member present and note the weight and rate. E-waste should go to an authorised e-waste recycler.
- Turn wet waste into compost. Larger societies are expected to compost or otherwise treat wet waste on their premises as far as possible, and the extra compost sells to residents and nurseries. A Mumbai society sells its compost at ₹75 a kg.
- Rent the hall, terrace or clubhouse. Birthday parties, poojas and meetings: a fixed fee and a refundable deposit, members first, with written rules on time, noise and cleaning.
- Rent ad space to local businesses. A corner of the notice board, a panel in the lift or at the gate for a clinic, a tuition class or a grocer. Hoardings that face the road need municipal permission.
- Festival sponsorships. Local shops often sponsor the Ganeshotsav or Diwali programme in return for a banner, which keeps the event off the maintenance bill.
- Parking. A fixed charge for a second car or for long visitor parking, as your general body decides.
Saving is earning too: solar panels for common lighting and pumps, LED lights and a leak-free water system all lower the bills every flat shares.
A worked example
A society of 96 flats tries four of these for a year. The figures are only an example; your rates will differ.
| Source | How | In a year |
|---|---|---|
| Hall bookings | 14 bookings × ₹1,500 | ₹21,000 |
| Ad space | 2 local businesses × ₹500 a month | ₹12,000 |
| Scrap and dry waste | About ₹800 a month | ₹9,600 |
| Compost | 80 kg × ₹75 | ₹6,000 |
| Total | ₹48,600 | |
| For each flat | ₹48,600 ÷ 96 | About ₹506 a year |
Keep every rupee on record
- Decide the rates and rules in a general body meeting and record them in the minutes.
- Take every payment into the society's bank account — UPI to the society, never to a member's own number.
- Give a numbered receipt for every payment, with who paid, how and for what.
- Show income by source in the accounts and report it at the AGM.
- Ask your auditor how tax and GST apply before you start charging outsiders.
How myNest helps
The treasurer records each payment in Society income: where it came from, who paid, how, and which fund it goes to, with a numbered receipt. Mistakes are corrected or cancelled with a reason, never deleted. A hall or item booking with a fee is recorded in one tap. The income counts in the balance in hand, fund balances, receipts and payments and the CSV export, and every member's dashboard shows what the society earned this year and what it comes to for each flat. Try it free for 30 days.
This guide is general information, not legal or tax advice. Your society's registered bye-laws and your chartered accountant have the final word.
Frequently asked questions
Does a housing society pay income tax on this?
Money members pay for common facilities is usually covered by the principle of mutuality. Income from outsiders, such as ad space or hall bookings by non-members, and interest from banks can be taxable. Ask your auditor or chartered accountant how it applies to your society.
Who decides the hall rent and the ad rates?
The general body, as your bye-laws provide. Record the rates and rules in the minutes and review them at the AGM.
What can the society do with the money?
The general body decides how a surplus is used under the bye-laws, for example adding it to the repairs fund or keeping maintenance from going up. Either way, record it first so every member can see it.