GST on Real Estate: know more about Taxes in 2019

Are you planning to indulge in buying an apartment in Concorde Mayfair Medahalli Bangalore? Before capitalizing your hard-won riches get the clear idea of the benefits you would avail under existing GST regime.

Concorde Mayfair

Real estate industry contributing 6%-8% to India’s GDP, is one of the crucial supports of the Indian economy and stands second after IT sector along the lines of employment generation. All investment either residential, commercial or retail are subject to tax under income on the property. Self-occupied, inherited properties, rented property, and various other types of properties that attract tax under income tax regulations. Even the unoccupied and vacant properties are treated as the self-occupied property under the income tax guidelines.

Under the GST regulation, construction of civil structures and complex buildings and Housing projects meant for the selling to the home buyers are subjected to be taxed at the rate of 12%. The luxury housing property is exposed to 12% of GST.

Tax and GST benefits for home buyers buying Concorde Mayfair Medahalli, Bangalore Project:

GST rates have been collected on renting of the homes. The affordable housing projects are excused from the Goods and Services Tax. If the project has received Occupancy Certificate then, no GST will be applicable to the project. That means, no tax will be levied on the purchase of a housing unit under GST regime in a completed project, where registry can be done, or, which received occupation certificate.

The buyer of the house will have to pay GST on the entire cost of the apartment at the rate of 12%, only If the project is complete and occupation certificate is sought for but not issued by the authority. i.e. the net cost of the property ownership goes higher for the buyer by the amount of GST levied, then it would be, had the project received occupation certificate.

However, if the builder presents the invoices of purchase of inputs, for the completed property for which he did not receive the occupation certificate. He would get the credit of 2.40% which he can pass on to the buyer.

Construction materials like cement, steel, sand, and iron also attract GST henceforward the property amount rises. So before investing have a clear idea and invest on a RERA approved property for more benefit. 

Under which section can buyers claim the tax

Various tax deduction sections are set by the Governing body taking into account mind the different types of buyers and their situation. Tax claiming the sections under the income tax rules are as follows:

Section 24: You can avail tax deduction of up to Rs 2 lakh under section 24 and can be claimed on the interest component of home loan repayment. Tax benefit under this section can be availed only if you live in the purchased property. You can claim benefit on the entire interest of the home loan If you have rented out the property. If the home loan is taken jointly with your family member, both of you can enjoy the tax benefit up to 2 Lakh each.

Pradhan Mantri Awas Yojana: first time home buyers can get home loans at a comparatively lower interest rate under PMAY- Pradhan Mantri Awas Yojana. PMAY is one of the initiatives by the Government of India to encourage home buying among the citizens. Also, if you are buying or investing in home for the first time you can avail the decreased GST from the government under PMAY scheme.

Section 80C: Aon repayment component of Home Loan a person can claim tax deduction of up to 1.5 Lakh under Section 80C. The tax deductions can be availed under Section 80C only on the purchase or construction of a new home. This section bounds you to keep the property at least for 5 years if you are to claim tax benefit under section 80C. You can claim tax deductions on stamp duty, registration charges and miscellaneous expenses related to transferring property in your name.

You can avail some deduction on the stamp duty too. Deduction of Stamp duty & registration charges can be availed under Section 80C. The maximum amount of 1,50,000 can be claimed under Section 80C. Stamp duty and registration charges are different for the male and female buyers.

Section 80EE: Provides tax benefit up to Rs.50,000 for first-time homeowners. Tax deduction under Section 80EE can be availed only if the total loan amount is less than 35 Lakh and the value of the house is less than Rs 50 Lakh. Section 80EE is only applicable if you have no previous home loan other than the availed home loan. This section does not give any benefit to Association of persons or a company and to Hindu Undivided Family (HUF). If you are a first-time property buyer, you can rent the property under Section 80EE.

Borne in mind the tax deduction you can claim while buying Concorde Mayfair residential apartment that is built for the best of investment and is RERA approved.