Know why and how service charge is charged on your property. If you don’t have any prior knowledge about it. Businesses charge service tax on under-construction property. Any property, building complex or civil structure which is offered for sale attracts the service charge. The amount is levied “ by the builder or real estate developer at the time the building complex, civil structure or parts are offered for sale.”
Deductions are Available on Service Charge
Exemption on service tax levied is only available in certain conditions:
- “Service tax is exempted on the sale of a single owner stand-alone residential building.”
- Low-area houses measuring only up to 60 square metres. “In this, the housing project should be approved by the competent authority under the scheme of Affordable Housing made by the Ministry of Housing, Government of India.”
Will the Government Tax Ready to Move Properties?
Ready to move and under construction- these are two types of properties. Presently there is no service tax levied on the movable property. So as per this condition, “no service is being provided to the buyer of the property. Property transactions attract high taxes and there are many opportunities for taxpayers to save tax. Therefore, it is advised that one should take professional tax advice before entering into any property transaction”.
Also read:
Personal Loan 2023: Latest Interest Rates, Types, Benefits, Eligibility, FAQs
Required Documents
- The PAN Card of the buyer will be needed.
- And property developer’s service tax registration number.
Applicable Tax Rate
Depending upon the size of the property the service tax levied will be either 3.75 per cent or 4.5 per cent.
“Service tax has to be paid by the fifth or sixth month of the month. Service tax has to be paid in March, which has to be paid by the central government by 31st March in the calendar year.”
