Vakil Search of Sulekha property explains whether one should pay the service tax in case the property is under construction. One will have to pay stamp duty on the sale value of the property if you purchase property after construction.
As per the new rules, Service Tax will be calculated at the rate of 12.36 percent of the gross value of the property. But, because there is a Government abatement of 75 percent (increased from 67 percent), tax will be levied only on 25 percent of the gross value of the property. The effective rate of service tax is therefore 2.575 percent.
Also read: CBEC to target 12 lakh non-filers of service tax: FM
b. The buyer has paid the entire consideration only after the building completion certificate had been obtained by the builder.
Considering the practical difficulties, the scope of the phrase ‘authority competent’ to issue completion certificate has been widened by issuing an order for removal of difficulty (Refer M.F.(D.R) Order No.1/2010 dated 22nd June 2010). Completion certificate issued by an architect or chartered engineer or licensed surveyor can be now taken to determine the service tax liability.”
READ MORE ON real estate, service tax, government, property, under construction, service tax act, local authority, Transforming India
ADS BY GOOGLE
Ask the Experts
Get your Personal Finance queries answered