BOOKING HOME BEFORE JULY MAY LET YOU ESCAPE 3% TAX

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Govt.May Exempt Flats Booked Before Notification of Widened Construction Service Tax Thoselooking to buya house would do well to book one before July,when the new service tax levy on construction service will come into effect.The cost of flats will go up 3.3% of the total purchase consideration onceservice tax begins to be levied on construction. Thegovernment is considering exempting from tax flats booked before thenotification of the expanded construction service, a finance ministry officialtold ET. “There is a case for giving relief to buyers who booked their housesbefore the service is notified... We are examining it,” he said. So, a buyerwho has booked a flat but will get possession only after the notification ofthe new service need not worry. A clarification to this effect may be issuedwhen the tax is notified after the passage of the finance bill, he said. TheUnion Budget proposes to expand the definition of construction service and levytax on housesunder construction as well. The new rule, which will comeinto effect when Parliament approves the budget, says service tax would beimposed if payments were made before the completion of construction. Realtycompanies typically sell property before they begin construction and fear thatthe move will hit the sector hard as it would lead to a rise in home prices anddepress demand. “The government must reconsider its decision to impose servicetax on under-construction housing as the real estate industry is already paying 14-16% as indirect taxes. The current move will makeaffordable housing unaffordable in future,” said the DLF spokesperson. Thegovernment plans to include charges such as development fee, parking fee andpremium location charges usually paid at the time of completion of constructionin the base price. Only 33% of the base price of the flat will be chargeable toservice tax levied at the rate of 10%, taking the effective tax to 3.3%. “Sincean amendment has been made in an existing service already under tax net, thereare diverse views whether this will be operative from a specific date afternotification or treated as a clarificatory amendment roping in constructionlinked paymentplans of houses under construction,” said Anil Kumar,CEO and deputy managing director, Ansal API. If it is to be operative from aprospective date, bookinga house in the next 3-4 months may result insavings of up to 4% for a customer, he added. However,the government remains firm on levying the tax. Revenue secretary Sunil Mitrasaid the proposal would not hike prices by more than 3.5%, an increase thatcould be afforded by the customers. Courtesy:-ET dt:- 05-Mar-2010 For more information regarding apartment in mumbai, bedroomapartments, buy property in india, commercial complex in india, commercial realestate, commercial space in mumbai, dealers, flats for sale, indian real estateinvestment, investment options in real estate, luxurious flats, malls, officespace, office space in mumbai, online real estate, penthouses mumbai, plots,property consultants, property in mumbai, property india, property investment,real estate company, real estate developer, real estate mumbai, real estate inindia, real estate investment strategies, real estate market, real estate news,real estate portals, realtors, realty, residence, residential real estate, sellproperty, shop, villas, Residential Apartment   Visit    www.zameen-zaidad.com             www.propertycafeteria.com

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