Relief for property buyers

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Ashish Gupta outlines some benefits in the Finance Bill
The Finance Minister has made a number of amendments to the Finance Bill for the year 2010-11. This includes concessions that will reduce the incidence of service tax on housing as well. There’s some relief for the real estate sector with the finance minister offering partial roll-back of service tax that was imposed on the sector during the budget.

There is also some relief for the housing sector with the services being reduced. The revised proposal provides tax relief to this sector by enhancing the rate of abatement from 67 to 75 percent of the gross value, where the value includes value of land constructed upon. The service tax outgo will now be calculated on 25 percent and not 33 percent of the value of the house. This will be a significant relief to consumers, although the quantum of impact will not be very big. However, it might have developers shifting focus to affordable developments.

In the original budget proposal, construction services were brought under the ambit of the service tax. This would have raised the cost of apartments that are still under construction. The Finance Minister had suggested that construction would be deemed to be a taxable service if the building or complex is still under construction and approval from the regular authority concerned – which in most cases is the municipal authority – hasn’t yet been granted. The levy would cover all construction services.

The service tax levy would be 10.3 percent and would also apply to additional services such as those offering preferential locations for flats in multi-storey building where flats in each floor are priced at a premium due to their description as a service and hence taxable.
The premium is typically levied on categories such as flats or apartments that are above a certain floor rise or other high value attributes such as being in front of a garden. The proposal was to tax construction if the entire payment for the flat was made before completion of construction.

The service tax was 10.3 percent on 33 percent of the price of the apartment, while on the remaining 67 percent tax was not to be levied. Now, this will be 10.3 percent of 25 percent of the price of the apartment.

For example, in case the cost of an apartment is Rs 25 lakhs, the service tax leviable will be on 25 percent of Rs 25 lakhs, i.e., Rs 6,25,000. The service tax will therefore be 10.3 percent of Rs 6,25,000, i.e., Rs 64,375. In addition, housing projects developed as part of slum redevelopment and rehabilitation under.

Courtesy financial times dtd. 09-may-2010
For more information about real estate, real estate india, Indian real estate, property, property in india, Indian property, property for rent, rented property, apartment for rent, rented apartment, flats for rent, rented flats in delhi, property for sale in delhi, apartments for sale in delhi, flats for sale in delhi homes for sale in noida, flats for sale in noida, real estate in noida, investment option in noida, real estate consultant in noida, realty firm houses in noida, residence in noida, residence in delhi, residence in gurgaon, flats for rent in gurgaon Log in to http://www.zameen-zaidad.com/
And http://www.propertycafeteria.com

Article Source: http://depositarticles.com/

Author Hi I am Abhinandan kr singh I am working in (Bhardwaj Buildtech Pvt Ltd) Company in Delh To Visit for more information www.zameen-zaidad.com & www.propertycafeteria.com/main.aspx

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