Preparation of budget of co -op housing society

Trivikram Kamath (Querist) 18 January 2021 This query is : Resolved
Please guide me for preparation of annual budget of a Co-op housing society in Mumbai.

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Preparing an annual budget for a Co-op housing society involves creating a financial plan for the upcoming year, outlining estimated income and expenditures. It's crucial to consult a local Chartered Accountant and follow any prescribed legal formats. The budget should detail all receipts and payments, including routine expenses, potential escalations, contingent costs, and income sources like member contributions and interest.

Guest (Expert) 18 January 2021
Could Post this Query in the CA Club of our same Forum

kavksatyanarayana (Expert) 18 January 2021
You consult the local CA for the preparation of the budget statement. The CA can do that.

K Rajasekharan (Expert) 19 January 2021
Budget is the annual financial plan of estimated expenditures and receipts for the ensuing year. It is the most important planning tool.

It is a continuation of last year’s budget. It should form the basis of next year’s annual statement of accounts which should be audited against the entries of each item in the budget for that particular year.

If there is a prescribed format for a housing organisation as per law, you must prepare the budget in it. If not, you can take a format from a government organisation, local body or a registered society as a model form and modify it for your purpose.

A budget should include every income or receipt, expenditure or other proposed payment, debt or loans, contingent charges, capital expenditure, deposits, liabilities etc.

For each one of this you can include a detailed statement as part of the overall budget. But the expenditures and incomes should show an overall zero sums on both sides.

A budget usually includes three columns: one for budget estimate for the current year, another for actual amount expended for the current year, and the estimate for the ensuing year.

In short, the budget should envision every item of expenditure meant for the ensuing year on capital items, revenue items, contingency, and other items.

T. Kalaiselvan, Advocate (Expert) 05 June 2021
A budget is a financial plan for a year.
• A budget is the sum of money allocated for intended
expenditures along with proposals for how to meet them.
• It may include a budget surplus in which Income
exceed expenditure, or a deficit in which expenses
exceed income.
• Section 75 of the Act provides that an annual budget shall
be presented by MC in AGM and get it approved.

List out the expenses of routine nature, consider the normal escalation in prices. Also consider the contingent expenses. List out the sources of income to the society viz, Contribution from members ,Interest income, Other sources income etc. Prepare a Budget statement.

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