As per the budget proposal for 2010-11, the finance ministry has suggested service tax on construction and sale of property. The contractor was entitled to claim abatement to the extent of 66.7 per cent of the value of services rendered by him. But recently, the Finance Minister has increased the concession on service tax applicable to construction of residential complexes from 66.7 per cent to 75 per cent of gross value of property, including land value.
Suppose you are buying a flat costing Rs. 50 lakh (cost of land, Rs. 40 lakh, cost of construction, Rs. 10 lakh). As per the 2010 budget, the applicable service tax was supposed to be Rs. 171,495 calculated at 10.3 per cent on 33.3 per cent of property value. With the amendment announced by the Finance Minister, the applicable service tax comes down to Rs. 128,750 calculated at 10.3 per cent on 25 per cent of property value. Thus, the savings will be Rs. 42,745.
The Finance Minister has also declared exemption from service tax for low-cost housing segment (less than Rs. 20 lakh). Suppose you are buying a flat in a smaller city for Rs. 18 lakh (cost of land, Rs. 6 lakh, and cost of construction, Rs. 12 lakh). With the amendment announced by the Finance Minister, there would be no service tax applicable.
The notification will be published in July 2010. Till issue of notification, there will be no service tax for under construction property. Property Buyers can pay amount for property and service tax will not be levied till July 2010. After issue of circular or notification, Service tax will be applicable only for under-construction properties and not for resale property.
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Tagged abatement, affordable housing, concession on service tax, construction and sale of property, exemption from service tax, low-cost housing segment, news, property news, real estate news, resale property, Service Tax, under-construction properties
Ahmedabad: Jayesh Patel and Vijay Patel residents of Suramya Society in Nikol were arrested for the murder of Gordhan Gedia. Gordhan Gedia was allegedly killed by Jayesh Patel and Vijay Patel following a scuffle that broke out between residents of Suramya Society in Nikol over availability of water.
Vijay Patel, resident of Suramya Society in Nikol attacked a group of people during a meeting that was held on the terrace of their apartment to resolve the long pending issue of non-availability of water. Gedia was killed and seven others injured in te attack.
Police inspector of Odhav police station, MS Sindha said that Patel had broken some pipelines in his building a few days ago. A meeting was later called to discuss the issue. In the meeting,Gordhan Gedia was allegedly killed following a scuffle that broke out between residents. With the arrest of Patels, the Odhav police have so far arrested four people including Kalu and Ashok Raghuvanshi in this connection. Meanwhile, the Odhav police have intensified their efforts to nab the two other absconding accused.
Lucknow: The Uttar Pradesh government has decided to increase property registration fee from exisiting Rs 5000 to Rs 10,000. The decision to hike property registration fee will earn the department an additional revenue of Rs 75 crore annually.
At present Rs 5,000 is the maximum fee charged for registration for executing sale deed of a property. UP government has decided to increase property registration fee to a maximum of Rs 10,000 from this december 1.
Principal Secretary Tax and Registration Desh Deepak Varma told news agency “Fee being charged at the time of registration of properties will be hiked from existing Rs 5,000 to Rs 10,000 from December 1,”. He said now one per cent fee would be charged for the registration of a property up to Rs 2.5 lakh and two per cent for properties above Rs 2.5 lakh.However, this fee will not be more than Rs 10,000.It will also provide relief to those who own property of value less than Rs 2.5 lakh.
Delhi: Delhi Government has finalized the draft of a new legislation on property aimed for checking fraudulent property transaction and will be introduced soon in Delhi Assembly. Delhi Chief Secretary Rakesh Mehta said the draft of the Delhi Urban Property Registration and Titling Act 2009 is ready and will be introduced in Delhi Assembly soon.The new legislation will provide a legal framework for granting property titles to all owners.
Mumbai: Revenue department has approved a proposal to levy a flat one per cent charge on property registrations with immediate effect.The decision on the one per cent property registration fee was taken by then Revenue Minister Patangrao Kadam early this year but was stayed ahead of elections. The stay was lifted by Revenue Minister Narayan Rane.
Bangalore: BBMP has sent nearly 2 lakh notices over the past 10 days. May 30, 2009, was the last date to pay the second half installment without penalty for 2008-09. Technically, the BBMP has powers to issue notices from September. However, the process was delayed till the compilation was complete.
Chennai: Associations with not-so-tech-savvy members are taking help to design the online platform. Bangalore-based start-up www.CommonFloor.com claims to have its presence in 22 cities. In Chennai, the company has designed the online apartment management tool for around 1,500 communities, where services like maintenance fee tracker, issue tracker, SMS reminders for active residents and owners’ association members come installed. Online communities help address issues effectively, particularly when members have no time to attend association meetings.
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