What is IFMS (interest-free maintenance security)?
Also called: IFMS, interest free maintenance security, IFMD, maintenance security deposit
IFMS is a one-time refundable deposit a builder collects at possession as a reserve for major repairs and maintenance shortfalls. It earns the owner no interest and is meant to be handed to the residents' association once it takes charge.
In Noida, Greater Noida and Gurugram, the possession demand almost always has an IFMS line. The usual rate is ₹50 to ₹150 per sq ft of super area, so a 1,500 sq ft flat can carry anywhere from ₹75,000 to ₹2.25 lakh. It is separate from advance maintenance, which prepays the monthly bill for the first 12 or 24 months. Mumbai and Bengaluru projects collect a corpus fund or sinking fund contribution for much the same purpose.
The name gives the game away: the deposit is interest-free to you, but nothing stops the builder parking it in an account that earns interest for years. Maintenance funds are meant to pass to the apartment owners' association once it is formed, and in Uttar Pradesh the Apartment Act of 2010 is built on that idea. Even so, many NCR associations have spent years chasing developers for IFMS, and non-transfer of the deposit is a recurring complaint before UP RERA.
Ask three things before paying. Which account will hold the IFMS, and in whose name. When it will move to the association, and whether the interest earned goes with it. And what happens on resale. In practice the deposit stays with the flat: the resale buyer reimburses the seller, and the association records the credit against the new owner.
A genuinely refundable deposit shouldn't attract GST, though some builders have added it anyway. If the demand letter shows GST on IFMS, ask for the basis in writing before you pay.
A buyer taking possession of a 1,250 sq ft super-area flat in Greater Noida West gets a demand for IFMS at ₹100 per sq ft, or ₹1.25 lakh, along with 12 months of advance maintenance at ₹2.75 per sq ft a month, which is ₹41,250 plus GST.
Expecting the builder to return IFMS when you sell or move out. It is tied to the flat and meant for the association, so the realistic way to recover it is from your resale buyer.
Questions people ask about IFMS (interest-free maintenance security)
Is IFMS refundable?
It is refundable in principle but tied to the flat. The builder should transfer it to the association, and a seller normally recovers it from the resale buyer.
Is IFMS the same as advance maintenance?
No. Advance maintenance pays the monthly bills for a fixed period and gets used up. IFMS is a security deposit meant to be held in reserve.