The GST had a positive effect on potential property buyers as it brought transparency to the taxation process. It also subsumed a host of indirect taxes and reduced the cascading effect. This is why you should know how to calculate GST on under construction flat 2021 if you are planning to buy a home.
GST for Under Construction FlatLet me explain the process of calculation of GST on an under-construction flat. I hope you know that a property is deemed as under construction if it does not have a Completion Certificate (CC).
For properties that are under construction, the govt. has provided relief for property buyers. A tax of 18 percent is levied on an under-construction flat, out of which you’re subjected to pay only 2/3
rd
, i.e., only 12 percent tax.
A deduction of 6 percent (1/3
rd
of the total tax) is made because it’s assumed that this is the value of the land being transferred. Tax is not levied on the transfer of land. This is why the final effective tax paid by the buyer is 12 percent.
After the Goods and Service Tax Council made the 33rd Amendment, the tax rate came down to 5% from 12%. I also want you to know that it’s only valid for a property with no Input Tax Credit.
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This is all you need to know on how to calculate GST on under construction flat 2021!
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Authors Of The Question
How to calculate GST on under construction flat?
Renuka
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3 Year
2021-10-26T17:08:37+00:00 2023-10-18T18:09:43+00:00Comment
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