Interest on delayed payment

Agreements for sale charge interest when a buyer pays a demand after the due date. Section 2(za) of the RERA Act says the rate charged to the allottee on default must equal the rate the promoter pays the allottee on its own default. State rules prescribe the rate, often linked to SBI's lending rate plus a margin.

Interest should be calculated from the due date in the demand letter, so demand letters must carry correct dates. Collections teams often waive interest informally. Treat waivers as discounts that need approval and a record.