Residential property in India is like a mazed puzzle; one needs to be deliberate; take logical analytic decisions; be able to join all the pieces; and probably the most important of all – have faith on God.
30 Mai 2017
Many owners of upmarket property in India will have to shell out an additional 2.5 percent tax on the maintenance charges they pay to their societies. All flat owners in India are required to pay maintenance charges for the upkeep and maintenance of their societies. The funds paid as maintenance charges by flat owners pay for security in gated communities in addition to ensuring that common areas are clean and well maintained. Elevators also remain functional due to the funds provided by the members of a society. In many societies with round the clock full power backup, funds collected from maintenance charges ensure a plentiful supply of electricity.
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Exceptions to A Higher Tax Rate
Currently, owners of flats are required to pay a rate of 15.55 percent on their maintenance charges which will now rise to 18 percent. The current tax regime has divisions which together add up to 15.55 percent. Flat owners today pay a .5 percent Swach Bharat Tax and a .05 percent non-agricultural tax in addition to the 15 tax rate they pay on maintenance charges. Under the tax rate in the GST regime, flat owners will be required to pay rate of eighteen percent.
Not all the owners of real estate in India need to be concerned about paying a higher tax rate. Many households shall be exempt from the higher rate of tax under the GST. For instance, societies that have an annual corpus or balance greater than 20 lakh rupees shall be required to pay to pay a maintenance tax under the GST. However, as an exception to the former case, societies that only have an annual balance of 20 lakh rupees after including stamp duty, property tax, electricity and water charges, or maintenance charges collected from residents shall not have to pay the higher 18 percent tax rate on maintenance charges.
exception under the GST to societies who have to pay a higher rate of tax under the GST also exists. In case a household in a residential society needs work on its interior or exterior which requires materials such as cement, steel, or paint, the tax paid for such materials shall be deductible against the GST tax.
According to an expert commenting on a property site, buyers who are eligible for exemption must first pay the GST after which they will be eligible for a tax credit.
Additional Exemptions
The higher maintenance charges under the GST regime are only applicable to a household which pays a maintenance charge that is greater than five thousand rupees, excluding stamp duty, property tax, and water and electricity charges.
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