[for the purpose of withdrawal of money from designated bank account of the project]

As per the provision of The Real Estate (Regulation and Development) Act 2016 (RERA),

As per section 4(2)(l)(D) of RERA Act;

 seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose:

Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project’ 

Hence, as per the above provisions, CA Certificate is required for the purpose of withdrawal of money from designated bank account.

The Govt. has uploaded a CA Certificate format in Form-S on http://up-rera.in/finalcertificates/finalcertificates/CACertificate.xlsx just some days back. 

After reviewing the Form-S, the following discrepancies found and the same has been brought in the notice of UP RERA department;

“that as per the uploaded CA Certificate format for withdrawing amount qtly from designated bank (70%), the following points need to be clarified;

1. As per the S.No.7;

“ Amount that can be withdrawn from Designated a/c, i.e.

(Row 6a* Row 5a) or (Column 4 of Row 4),whichever is less”

Here it is mentioned ‘Less’ but if we calculate the amount for withdrawal from designated bank we need to consider ‘whichever is More’, hence pls clarify either Less is ok OR More to be replaced, awaiting for your reply.

2. As per the S.No.3;

“ Cost of Development  / Cost  of construction”

Here most of the heads of expenses mentioned, but about project financing charges/interest paid on project loan taken etc. not mentioned, so can we insert a sub-heading like this just after (d)….(e) Other cost related to construction (other than above, including finance cost)…..and consider all other direct costs attributable to construction of project directly which is not incorporated in any head of expenses…

As per section 11(g) of RERA Act;

‘ pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings (including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project)’

Hence, as per the above section, the cost of financing of the project needs to be incorporated in CA certificate format, further if also refer the Maha Rera CA certificate, the same is clearly mentioned.

Conclusion; according to my point of view & interpretation, the cost of finance of the project is required to be incorporated in CA certificate, and the calculation formula for eligibility for withdrawal from designated bank account (70%) is also to be modified.

Disclaimer: This insight is meant for informational purpose only and should not be considered as an advice or opinion, or otherwise, whatsoever. Author does not intend to advertise its services through this insight, and not responsible for any error or omission in this insight or for any action taken based on its contents.

Author CA M.S. Prasad [FCA, MBA,LL.B, B.Com(H)],  can be reached at +91 8802253937, [email protected][email protected])


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  1. vswami says:

    To ADD- to re-share Posts on FB/ Linkedin (: Implications of sec 45 (5A) and Amended Sec 50 C need to be considered; and those are of direct and indirect relevance /of most concern to CAs, auditing /certifying both Promoters / landowners being parties to “JDA” s !

  2. vswami says:

    To quickly re-share , in pith and substance:

    A fresh spate of like problems are noted to have surfaced in the wake of the TN RERA Rules of 2017 ; which have the inevitable consequence of driving CAs in field-practice, in other states as well, who may be engaged for issuing a certificate in Form ‘S’, crazy. For, that , in turn, additionally entails GST implications.

    For thoughts and viewpoints personally shared, on a tentative study of the referred RERA Rules, may look through the several Posts on FB and Linkedin.

  3. vswami says:

    Comments (Tentative):

    For consideration, in-depth, independently, by the appointees for certifying, –

    (i) firstly in terms of the second proviso to sec 4 (2) of the RERA Act (including the CAs); and

    ii) secondly, by the CAs reporting on and certifying the promoters’ accounts as per the third Proviso thereto.

    For obvious reasons, it needs to be ensured that there is no disparity or mismatch between the two certifications.

    Be that as it may, it is anybody’s guess how that could be so ensured, from a practical point of view; particularly, without a set of clear-cut fool-/ -safe proof / standards prescribed, and controlling mechanism, in place, so as to render those to be mandatorily followed, by default, for both the said purposes, in harmony.

    MORE :
    A) In terms of the further/second Proviso to sec 4 (2), withdrawal is permitted of the ‘amounts’ after it is certified by an engineer, an architect AND chartered accountant IN PRACTICE. (FONT supplied)
    The highlighted words call for special focus and mindful consideration.

    Points requiring clarity:
    1. Is use of the conjunction ‘AND’ intended to signify that the responsibility for certification is joint and several of all the three, including the CA; albeit, a CA is not to be taken to be duly qualified and equipped to appraise and confirm the correctness of the ‘percentage of completion of the project ‘ based on which withdrawal is permitted.
    2. Are the words, – ‘IN PRACTICE’ intended to qualify / cover all the specified three professionals, – not only CA.

    Further, the tenor of the title head of ‘Form -S’, so also the bottom lines (the certification portion) , are equally confusing and UN-intelligible, not being free from ambiguity.

    B) As regards the concept of ‘completion of the project’ as envisaged, there could be other difficulties likewise faced with.
    For instance, now that, unlike before, the RERA Act permits ‘phase-wise’ completion and occupation, the implications thereof, in the light of the applicable state enactment (e.g. MAOA and KAOA in force in Maharashtra and Karnataka, respectively) may have to be borne in mind and given a conscious consideration; and clarified as warranted.

    Over to eminent Experts, in field practice, for independent thoughts and views, if any, to share on the foregoing; do do for the common good..

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June 2021