Society Auditor Services in Mumbai — CHS Statutory Audit, Co-operative Society Accounts & Maharashtra Co-op Act Compliance

Society Auditor Services in Mumbai

Every co-operative housing society (CHS) in Maharashtra is required by law to get its accounts audited annually by a qualified society auditor. This is not optional — it is a statutory obligation under the Maharashtra Co-operative Societies Act, 1960. Yet in thousands of housing societies across Mumbai, Thane, Navi Mumbai, and Pune, the society audit is treated as a formality — a box to tick rather than a genuine financial health check for the members who have invested crores in their homes.

A properly conducted society audit does far more than certify that the books balance. It protects flat owners from mismanagement of maintenance funds, flags irregularities in sinking fund and repair fund usage, verifies that GST is correctly applied and deposited, checks that TDS has been deducted and filed on contractor payments, and ensures that the managing committee is operating within its authority under the by-laws and the Maharashtra Co-op Act.

N D Savla & Associates has been appointed as society auditor for co-operative housing societies across Mumbai, Thane, Navi Mumbai, and the surrounding areas for over 25 years. Our society audit engagements are thorough, timely, and explained in plain language — so every member of the managing committee understands the findings, not just the CA.

What Is a Society Audit and Why Is It Mandatory?

A society audit is the statutory annual audit of the accounts and financial records of a co-operative housing society, conducted by a qualified auditor approved under the Maharashtra Co-operative Societies Act, 1960 (MCS Act). Section 81 of the MCS Act makes the annual audit of every registered co-operative society mandatory. The audit must be completed within a specified period after the close of each financial year, and the audited accounts must be placed before the general body meeting of the society.

A complete society audit covers:

• Receipts and payments account verification — All receipts — maintenance charges, non-occupancy charges, parking charges, interest income — and all payments — repairs, utilities, contractor bills, insurance — are verified against vouchers, bank statements, and receipts.
• Income and expenditure account review — The income and expenditure account is reviewed for correct accounting treatment, proper allocation of income and expenses, and compliance with the society's approved budget.
• Balance sheet verification — All assets and liabilities — including sinking fund, repair fund, major repair fund, and corpus fund balances — are verified against supporting records and bank statements.
• Maintenance and levy collection review — Collection of maintenance charges from all members is verified. Arrears — outstanding dues from defaulting members — are specifically documented, as these are a common audit finding.
• Sinking fund and repair fund compliance — Under the MCS Act, every CHS must maintain a sinking fund and a repair fund. The society auditor verifies that contributions are being made at the prescribed rates, that fund balances are correctly maintained, and that withdrawals have been properly authorised.
• Contractor and vendor payment review — All payments to contractors and vendors — AMC providers, lift maintenance, security agencies, cleaning contractors — are verified for supporting documents, proper authorisation, and TDS deduction compliance.
• TDS compliance check — Housing societies making payments above specified thresholds to contractors and professional service providers are required to deduct TDS. The society auditor verifies that TDS has been correctly deducted and deposited within the due dates.
• GST compliance review — Co-operative housing societies with annual receipts above ?20 lakh are required to register under GST and charge GST on maintenance. The society auditor verifies GST registration status, correct rate application, timely filing of GST returns, and ITC claims where applicable.
• By-laws and MCS Act compliance — The society auditor checks that the managing committee has operated within its authority under the by-laws — including procurement limits, approval requirements for major expenditure, and adherence to general body resolutions.

Society Audit Compliance Calendar — Key Deadlines Every CHS Must Know

Who Appoints the Society Auditor and Who Can Be Appointed?

Under the Maharashtra Co-operative Societies Act, the society auditor is appointed by the general body of the society at its Annual General Meeting. The auditor must be a Chartered Accountant (CA) in practice or an auditor from the panel maintained by the Co-operative Department. For larger housing societies above a specified membership size or asset threshold, only a qualified Chartered Accountant firm is eligible for appointment.

The appointment must be formally recorded in the AGM minutes, and the auditor's consent and eligibility must be confirmed before appointment. The same auditor cannot be appointed for more than five consecutive years under rotation norms — the managing committee should plan for auditor rotation in advance to avoid a last-minute scramble for a qualified society auditor.

How We Conduct a Society Audit — Our Step-by-Step Process

1. Document Collection and Pre-Audit Review — We send a structured document checklist to the society secretary or managing committee — covering all items required for the society audit: cashbook, bank passbooks and statements, receipts, payment vouchers, maintenance demand and collection register, sinking fund and repair fund passbooks, contractor bills with work orders, AGM and committee meeting minutes, previous year audit report, and any Registrar correspondence.
2. Cash and Bank Verification — All bank accounts operated by the society — including the main operating account, the sinking fund account, the repair fund account, and any fixed deposit accounts — are verified against bank statements and passbooks. Bank reconciliation statements are prepared and reviewed for long-outstanding entries.
3. Maintenance and Levy Collection Audit — The maintenance demand register is verified to confirm that maintenance has been correctly calculated for all members — based on carpet area, flat type, or whichever basis the society uses — and that all applicable charges have been correctly levied. Collections from each member are traced from the demand register to the cashbook and bank statement. Arrears are listed member-wise and reported in the audit report.
4. Expenditure Verification — Every payment made by the society during the year is verified against supporting vouchers, bills, and authorisation records. Major expenditure items — repair and maintenance contracts, elevator AMC, security agency bills, utility bills, insurance premiums — are traced to the contracts or purchase orders, verified against general body or managing committee approval, and checked for TDS deduction where applicable.
5. Fund Balance Verification — The sinking fund, repair fund, and major repair fund balances are verified against the respective bank passbooks and fixed deposit receipts. Annual contributions to each fund are checked against the prescribed rates under the MCS Act and the society's by-laws. Withdrawals from restricted funds are verified for proper general body approval and permissible end use.
6. TDS Compliance Review — We identify all payments during the year that were subject to TDS — contractor payments under Section 194C, professional fees under Section 194J, rent under Section 194I (where applicable). We verify that TDS has been deducted at the correct rate, deposited on time, and that TDS returns (Form 26Q) have been filed for all applicable quarters.
7. GST Compliance Review — For societies registered under GST, we verify: GST registration validity; correct GST rate applied on maintenance charges (18% on the portion of maintenance exceeding ?7,500 per member per month); timely filing of GSTR-1 and GSTR-3B returns; correct ITC claims on purchases and services procured for the society.
8. Audit Report and Audit Rectification Report Preparation — We prepare the society audit report covering all findings — income and expenditure, balance sheet, fund-wise verification, maintenance collection status, TDS compliance, GST compliance, and by-law compliance observations. We also prepare the audit rectification report (ARR) — listing each audit observation with the recommended corrective action and the timeline for rectification. Both documents are handed to the managing committee in physical and soft copy, ready for presentation at the AGM and filing with the Deputy Registrar.

Common Society Audit Observations — and What the Managing Committee Should Do

GST on Housing Society Maintenance — What Every CHS Needs to Know

• GST registration threshold — A housing society must register under GST if its total annual receipts exceed ?20 lakh in a financial year. Registration is mandatory once this threshold is crossed — it is not optional.
• GST on maintenance charges — GST at 18% is applicable on the portion of maintenance charges that exceeds ?7,500 per member per month. If a member pays ?10,000 per month in maintenance, GST at 18% is applicable on the full ?10,000 (not just the excess above ?7,500). This is a common point of confusion.
• GST exemption for small societies — If a society's total annual receipts are below ?20 lakh, or if every member's monthly maintenance contribution is ?7,500 or less, no GST is applicable on maintenance. However, the society must still check whether it crosses the registration threshold on total receipts.
• ITC on purchases — GST-registered housing societies can claim input tax credit (ITC) on GST paid on services procured for the society — lift maintenance AMC, security agency bills, housekeeping services — but not on blocked credits under Section 17(5) of the CGST Act.
• GST returns to be filed — Registered housing societies must file GSTR-1 (monthly or quarterly) and GSTR-3B monthly. Annual GSTR-9 is also required if turnover exceeds ?2 crore.

Society Audit for Different Types of Co-operative Societies in Mumbai

Residential CHS — Apartment Buildings

The most common type of society audit. Covers maintenance collection, sinking fund and repair fund, building repairs and AMC payments, utility bills, security and housekeeping expenses, TDS on contractors, and GST on maintenance. We are experienced with societies ranging from 10-flat buildings in South Mumbai to 500-flat complexes in Thane and Navi Mumbai.

Redevelopment Societies

Societies undergoing redevelopment have complex financial flows — corpus fund received from the developer, transit rent payments to members, and the management of society funds during the redevelopment period. Our society audit for redevelopment projects verifies that corpus fund receipts are correctly accounted, that transit rent payments are made per the agreement, and that the managing committee is operating within the development agreement.

Commercial Co-operative Societies and Shopping Arcades

Commercial co-operative societies — office complexes and shopping arcades registered under the MCS Act — have different income streams including maintenance from commercial members, parking income, and common area charges. GST applicability is more complex in these settings, and TDS obligations are typically higher due to larger contractor payments.

Federation of CHS and Apex Societies

Federations of housing societies — apex bodies that represent multiple individual CHS — require a separate audit of the federation's accounts, distinct from the individual member societies. Membership subscription income, event expenses, legal representation costs, and the federation's own fund balances are covered.

Why N D Savla & Associates as Your Society Auditor

• 25+ years of Mumbai society audit experience. We have been conducting society audits for co-operative housing societies across Mumbai, Thane, and Navi Mumbai for over 25 years. We understand the practical realities of managing committee operations — not just the theory of the MCS Act.
• Clear, plain-language audit reports. Our society audit reports are written to be understood by managing committee members, not just accountants. Every observation is explained in plain language, with the specific by-law or regulatory provision cited and a clear recommendation for rectification.
• TDS and GST integrated. Unlike many society auditors who focus only on receipts and payments, our society audit integrates TDS compliance and GST verification — the two fastest-growing sources of penalty and notice for housing societies in Mumbai today.
• Timely delivery. We understand that managing committees have AGM deadlines and Registrar filing obligations. Our society audit engagements are completed within the agreed timeline — we do not leave committees scrambling for the report a day before the AGM.
• Available for committee guidance throughout the year. We are available to advise managing committees on accounting queries, GST applicability doubts, TDS deduction questions, and by-law compliance issues throughout the year — not just at audit time.
• Partner-supervised engagement. Every society audit is supervised by a qualified Chartered Accountant partner. The audit report and audit rectification report carry professional CA sign-off.

Frequently Asked Questions — Society Audit in Mumbai & Maharashtra