If your builder handed you a possession date that came and went months ago, you already know you're owed something. What most homebuyers don't know is how that number is actually worked out — and that gap is exactly where builders count on you giving up or accepting a lowball settlement.
This is a walk-through of the real calculation, using an actual worked example, so you know what number to expect before you ever talk to your builder or file a RERA complaint.
What Section 18 actually gives you
Section 18 of the Real Estate (Regulation and Development) Act, 2016 gives a delayed buyer two separate paths, and you get to choose:
- Withdraw and get a full refund of everything you've paid, plus interest for the entire period your money sat with the builder.
- Stay invested and claim interest for every month of delay, without giving up your flat.
Most buyers who still want the property go with option two — which is what the calculation below covers.
The interest rate isn't negotiable — it's fixed by law
Under the RERA Rules, the interest rate for delay compensation is SBI's highest Marginal Cost of Lending Rate (MCLR) plus 2% per annum. This isn't something your builder gets to argue down. It's a statutory formula, and it applies whether you're in Mumbai, Bengaluru, or a tier-2 city — the only thing that changes state to state is which authority enforces it and how quickly.
As of the current cycle, SBI's highest MCLR (3-year tenor) sits close to 8.80%, which puts the effective delay interest rate around 10.80% per annum on the amount you've actually paid — not on the total flat price, on what you've paid so far.
A worked example
Say you booked a flat for ₹80 lakh and paid ₹60 lakh in construction-linked installments by the promised possession date. Possession was due in March 2024. It's now July 2026 — a delay of 28 months, and counting.
- Amount paid: ₹60,00,000
- Applicable rate: 10.80% per annum (SBI Highest MCLR + 2.00%)
- Delay period: 28 months
Simple interest for this period works out to roughly:
₹60,00,000 × 10.80% × (28 ÷ 12) ≈ ₹15,12,000
That's the amount the builder owes you in addition to eventually handing over the flat — and it keeps growing every month possession isn't given. This is exactly the calculation our RERA penalty calculator runs automatically once you enter your dates and amount paid, including the correct state-specific rate.
What counts as "amount paid" — and what doesn't
This is where a lot of buyers either under-claim or get pushback from builders:
Counts toward the calculation: booking amount, every construction-linked installment, parking charges, preferential location charges (PLC), club membership fees, and any other amount specified in the sale agreement.
Doesn't count: stamp duty and registration fees paid to the government — those go to the state, not the builder, so they're excluded from the interest base.
What is the RERA interest rate for delay payment by buyer?
Everything above covers interest the builder owes you for delaying possession. But the same rate works in reverse. If you, as a buyer, miss a scheduled installment payment, the builder can charge you interest at the identical RERA-prescribed rate — SBI Highest MCLR + 2%, currently around 10.80% per annum.
This symmetry is deliberate. Sections 19(6) and 19(7) of the RERA Act require buyers to make payments according to the agreed schedule. If you default, interest accrues on the outstanding amount from the installment due date until you actually clear it. The formula is the same as the builder delay calculation above:
Outstanding Installment × 10.80% × (Days Late ÷ 365)
For example, if you owed a ₹10 lakh milestone payment and paid it 90 days late, the builder can legitimately charge you roughly ₹26,630.137 in delay interest on that installment.
Most state RERA authorities enforce this identically — the rate for buyer late payment is the same as for builder delay, with no separate negotiation. You can use our RERA penalty calculator in "Buyer Late Payment" mode to compute this automatically for any amount and delay period.
You don't need a registered agreement to claim this
A common builder tactic is to argue that without a formal, registered Agreement for Sale, there's nothing to enforce. Appellate tribunals have rejected this repeatedly. In one 2023 Maharashtra case, the tribunal awarded a buyer 10.75% annual interest on a ₹40 lakh investment for a two-year delay, accepting the allotment letter alone as sufficient proof of the promised possession date — no registered agreement required.
Keep whatever you have: allotment letter, payment receipts, brochure with a possession date, even email or WhatsApp correspondence where the builder committed to a timeline. Any of these can anchor your claim.
The Supreme Court on refund and delay remedies
The Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. (2021) affirmed that an allottee's right to seek a refund with prescribed interest under Section 18 is unqualified when the promoter fails to deliver possession within the committed timeline. This built on the Court's earlier ruling in Imperia Structures Ltd. v. Anil Patni (2020), which confirmed that an allottee who wishes to withdraw from a delayed project cannot be compelled to take possession once the agreed completion deadline has lapsed.
In practice, this means an allottee who opts to exit a stalled project has a clear, statutory right to a return of the amount paid along with prescribed interest as directed by the regulatory authority.
One thing to watch: don't double-count interest
If you took a home loan for this purchase and you're still paying EMIs on a flat you haven't received, it's tempting to claim both the RERA delay interest and separate interest on your bank loan as one combined damages figure. A 2025 Supreme Court ruling clarified that these generally can't be stacked together unless your agreement expressly provides for it — the RERA delay interest is meant to be the compensation, not an add-on to bank loan interest. Claim the correct one cleanly rather than inflating your number, which just gives the builder's lawyer an easy reason to contest the whole claim.
What to do with this number once you have it
Once you know your figure, the next step is putting the builder on formal notice — most buyers get faster movement from a properly worded Section 18 notice than from silence followed by a surprise RERA complaint. Our free notice of delay letter generator creates a ready-to-send legal notice with your calculated amount already built in, which is usually the fastest way to get a builder to actually respond before you need to file with your state's RERA authority at all.
If you're a buyer in Bihar specifically, we've written a detailed Bihar RERA possession delay guide covering the BiharRERA portal, Form N filing, fees, and the Patna office details you'll need.
For a broader overview of all your rights under RERA — including how much compensation you can claim, the difference between refund and monthly interest, state-wise rules, and Supreme Court rulings that protect homebuyers — see our complete guide to RERA compensation for delay in possession.
Frequently asked questions
What is the current RERA interest rate for delayed possession?
The RERA interest rate for delayed possession is SBI's highest MCLR + 2%, which currently works out to approximately 10.80% per annum. This rate applies to the total amount paid by the buyer, calculated from the promised possession date until the actual date of handover.
Is the RERA interest rate for delay payment by buyer the same as for builder delay?
Yes. Under the RERA Act, the interest rate is symmetrical — both builders and buyers pay the same rate (SBI Highest MCLR + 2%) for their respective defaults. If a buyer delays an installment payment, the builder charges interest at 10.80% p.a. on the overdue amount. If the builder delays possession, the buyer receives interest at the same rate on the amount already paid.
How do I calculate the exact amount of RERA delay interest?
Use this formula: Amount Paid × Interest Rate × (Delay in Days ÷ 365). For example, on ₹50 lakh paid with a 2-year delay at 10.80%, the interest would be approximately ₹10,80,000. Our RERA penalty calculator runs this automatically with state-specific rates.
This article is for general informational purposes and reflects the statutory formula and reported case law as of 2026. It isn't a substitute for advice from a RERA-specialist advocate on your specific case.