IFMS (interest-free maintenance security) is a deposit collected by the builder that is meant to be held as a corpus and passed to the residents' association. Advance maintenance is maintenance paid ahead for a period, often a year or two, and it is used up month by month. One is a deposit, the other is a prepayment.
Side by side
Factor
IFMS
Advance maintenance
Nature
Security deposit
Prepaid charges
Used up
No; held as a corpus or for major repairs
Yes, against monthly bills
Refundable
Transferred to the association; not usually refunded to the owner
No, once consumed
Basis
Per square foot, set by the builder
Per square foot for a set period
Where the term is common
National Capital Region projects
Everywhere
On resale
Stays with the flat; adjust it in the price
Any unused balance stays with the flat
When IFMS matters
Ask the builder for an account of IFMS collected and confirm in the agreement when it will be handed to the association.
When Advance maintenance matters
Check how many months of advance maintenance you are paying and what the monthly rate is.
In more detail
Names vary: maintenance deposit, sinking fund, corpus fund. Read what each charge in the demand letter is for and whether it is a deposit or a prepayment.
When the association takes over maintenance, it should receive the deposits collected for the building. Associations can pursue builders who hold them back, including through the state RERA authority for registered projects.
Common questions
Is IFMS refundable?
It is meant to be transferred to the residents' association, not refunded to individual owners. Check the agreement.
Is GST payable on IFMS?
GST treatment depends on whether the amount is a true deposit and how it is used. Ask the builder for the basis and check with a tax adviser.
What happens to IFMS when I sell the flat?
It stays with the flat and the association. Buyers and sellers often adjust it in the price.