Why Sinking Fund

Apartment society has regular maintenance requirement and major maintenance and capital requirements. For the regular maintenance requirements, the society (whether being managed by the apartment association, Co-Operative Housing Society or builder), raises the maintenance bills. A society however has some non-periodic maintenance and major funds’ requirements. The societies raise sinking fund or repair fund for such scenarios. Why should there be separate contributions as sinking fund and repair fund? Are these contributions taxable?

 

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