RERA Chartered Accountant Certification & Audit: What It Actually Involves
Every rupee withdrawn from your RERA escrow account requires a Chartered Accountant certificate before the bank can release funds. Every project registered under RERA must maintain separately audited accounts. Every quarterly compliance update filed with the state Authority must be backed by accurate financial data, which some states require a practising CA to certify.
Understanding the Service
The Real Estate (Regulation and Development) Act, 2016 created two categories of mandatory CA involvement for every RERA-registered real estate project in India. The first is recurring: every withdrawal from the dedicated project escrow account — the account in which 70% of all allottee collections must be maintained under Section 4(2)(l)(D) — requires a contemporaneous certificate from a Chartered Accountant certifying that the withdrawal is in proportion to the percentage of completion of the project and is being used exclusively for land cost or construction cost of that project. This certificate must be obtained concurrently with certificates from the project Architect (certifying completion percentage) and a registered Engineer (certifying structural progress).
For the full scope, current process and what PNPC includes, see the dedicated RERA Chartered Accountant Certification & Audit service page.
When You'd Need This
- Any withdrawal from the dedicated RERA project escrow account — the second proviso to Section 4(2)(l)(D) requires engineer, architect and CA certification before each withdrawal; this applies to every RERA-registered project regardless of project size or state
- Annual audit of project accounts — the third proviso to Section 4(2)(l)(D) requires the promoter's accounts to be audited by a practising CA within six months after the end of every financial year, verifying that project collections were used for the project and withdrawals matched completion; state rules prescribe the format and portal upload
- At the time of RERA project registration — many state Authorities require a CA-certified project cost estimate as part of the registration application; this estimate typically becomes the benchmark for escrow withdrawals (registration fees are set separately under state rules)
- Quarterly compliance updates filed with the state RERA Authority — accurate financial data underlying the quarterly portal update (collections, escrow balance, withdrawal amounts) must be backed by properly maintained accounts from which a CA can certify
Before You Assume You Need This
- Projects that are exempt from RERA registration under Section 3(2)(a) — land area proposed to be developed not exceeding 500 square metres, or not more than 8 apartments proposed inclusive of all phases (the statute uses 'or', but state Authorities have differed on how the two limits combine, so confirm your state's position); if the project does not require RERA registration, the RERA-specific CA certification obligations do not apply (though ordinary financial audit may still be required)
- Completed projects for which the Occupancy Certificate has been issued and full possession completed — once OC is received and all possessions are handed over, the quarterly RERA compliance cycle ends; only the post-possession defect liability period under Section 14(3) remains, which does not require ongoing CA certification
- Pure real estate agency or brokerage businesses — RERA agent registration (under Section 9) does not carry the same escrow or audit obligations as promoter registration; RERA CA certification requirements apply primarily to promoters, not agents
Common Questions
What is the RERA CA certification for escrow withdrawal and why is it required?
Section 4(2)(l)(D) of the Real Estate (Regulation and Development) Act, 2016 requires every promoter to maintain 70% of all amounts realised from allottees in a dedicated escrow bank account. Funds from this account can only be withdrawn for land cost and construction cost of that specific project. Before each withdrawal, the promoter must obtain a certificate from a Chartered Accountant certifying that the withdrawal is in proportion to the percentage of completion and is for permissible purposes. Banks holding the account generally require this certificate before processing the withdrawal.
Is the CA escrow withdrawal certificate required for every single payment from the escrow account?
Generally yes — the second proviso to Section 4(2)(l)(D) requires withdrawals to be made after certification by an engineer, an architect and a practising CA that the withdrawal is in proportion to the percentage of completion, and it sets no de minimis threshold. In practice this means a CA certificate on proportionality and permissible use, alongside the Architect's and Engineer's certificates, for each withdrawal; state rules and bank practice set the exact formats, so confirm your state's position.
What formula does the CA use to calculate the permissible escrow withdrawal amount?
The calculation is broadly: (Percentage of project completion certified by Architect) × (Estimated total project cost) = Total permissible cumulative withdrawal to date. From this, subtract all prior cumulative withdrawals from the escrow account. The balance is the maximum permissible withdrawal in the current cycle. The Estimated total project cost is taken from the project cost estimate certified at the time of RERA registration. This is why an accurate project cost estimate at registration is critical — it defines the escrow withdrawal ceiling throughout the project.
Getting This Right From the Start
Your RERA escrow withdrawal certificate is not a document to chase every time a contractor invoice arrives — it is a scheduled, protocol-driven CA service that should run as smoothly as your project's construction timeline. Contact PNPC Global today to establish a RERA CA certification framework that keeps your escrow compliant, your contractor payments on schedule, and your project file ready for any Authority review.
PNPC Global has advised Chennai, Bangalore and Hyderabad businesses since 1986. Explore the full Registrations & Licences practice for related services, or go straight to the RERA Chartered Accountant Certification & Audit page for specifics.
Specific rates, fees, thresholds and deadlines are set by the relevant authority and change over time — this article deliberately does not quote figures that could go stale. Confirm current numbers directly with PNPC or the official source before you act.