Service Tax On Property: There are many things in the country on which the government has to pay tax. In which your property is also included. Service tax is applicable on the property. Let us know how much tax will have to be paid and at what time the tax will have to be paid.
Have you heard about Service Tax? Service tax is levied on the services provided by a business. Similarly, Service Tax On Property has to be paid on the property as well. Property owners have to take care of many things while buying a house. Firstly, there is always a confusion regarding whether service tax is payable on property. Today we will tell you when this tax has to be paid on the property.
When a buyer purchases a property, the ownership is transferred to that person and the seller becomes the service provider of the property on which service tax is payable. However, the same has to be paid before the Competent Authority issues the completion certificate.
What is service tax and when it is levied.
There are two types of property, ready to move and under construction. In the real estate sector, service tax is levied only on under-construction properties. It is charged on any property, building complex or civil structure offered for sale. Service tax is levied on under-construction property by the builder or real estate developer at the time the building complex, civil structure or parts are offered for sale.
No tax to be paid on ready
to move In ready to move in property mainly there is no need to pay any service tax. The reason for this is that the property developer is selling such a property which is completely built. It is not providing any service to the buyer of the property. Property transactions attract high taxes and provide many opportunities to taxpayers to save tax. Hence, it is advised to take tax related advice from a professional before buying/selling any property.
Exemption is available in these cases
The rate of service tax on property is 3.75 per cent or 4.5 per cent, depending on the size of the property and the value of the transaction. Service tax is exempted on the sale of a single owner stand alone residential building. Apart from this, low-cost houses whose carpet area is up to 60 square meters. 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.
