Buying a house is a big financial decision as it involves dipping into one’s life savings and requies meticulous planning. Buying a house involves not just paying for the apartment, but also paying associated taxes and duties like Stamp duty, Registration charges, Tax deducted at source (TDS) and Goods and Services Tax (GST).
Let’s understand in detail why and when the above duties and taxes need to be paid while purchasing an apartment:
A Stamp duty is a kind of tax which is levied upon by the state government when an immovable property is bought and sold by an individual. A stamp duty is charged as per the provision of The Indian Stamps Act . The stamp duty chargeable on the entire agreement value as mentioned in the Sales Agreement Stamp duty rate varies from State to State and it may also vary for different cities with a state.
For example : As of today the Stamp duty rate for buying a real estate in the city of Mumbai is 5% and its 6% in Thane and Navi Mumbai. In a situation when the agreement value is less than the Ready Reckoner rates, stamp duty would be charged as per Ready Reckoner rates
Registration charges would also be levied on a real estate transaction along with the Stamp duty charges Registration charges are levied as per the provisions of the Indian Registration Act.
Registration charges are levied to get the transaction registered with the Registrar. In Mumbai registration charges would be either 1% of the agreement value or Rs. 30,000/- whichever is the lowest.
TDS (Tax deducted at source):
In real estate transactions involving properties worth more than 50 Lakhs, a TDS worth 1% of the agreement value needs to be paid to the Govt. of India. The onus of deducting the TDS lies with the buyer and the amount needs to be paid after deducting 1% of the agreement value as Tax deducted Source TDS.
GST (Goods and Services Tax):
GST is charged only in case of an under-construction property till the time Occupation Certificate (OC) is not received. GST rate for an under-construction property is 12% on the agreement value.
The Real Estate Management Institute- REMI is a leading educational institute in India that provides programs specially designed for the real estate industry. REMI was established with a vision to ‘Skill India to Build India’ to contribute to industry development through training programs and to facilitate individual careers, as well as enhance leadership for existing real estate professionals.
REMI currently provides certification programs, executive courses and customized training workshops specially designed for the real estate industry. Our programs are run using the Socratic style of teaching, as we offer world-class best practices and a global curriculum to enable new entrants, early-stage professionals, entrepreneurs and leaders adapt to the evolving regulatory regime.
REMI is a pioneer in the field of real estate education in India having trained 2400+ People since our inception. REMI has over 320+ Corporate Association, 180+ Affiliated Visiting Experts and offers 100% Internship and Placement through a dedicated Career Development Centre (CDC). We are constantly exploring new dimensions and partnerships to help us stay ahead. Some of our partnerships include collaboration with The Institute of Real Estate Management (IREM), USA, Ganpat University in Ahmedabad, Practicing Engineers, Architects and Town Planners Association (PEATA), Habitat for Humanity, among others.
Our flagship Certifications in Business Management and Housing Finance (BMF 201), the Broker Certification Program (BCP 201),the Owner Developer Program (ODP) are just the tip of the iceberg. Our ability to curate industry-relevant programs with experts and thought leaders is our specialty. We currently offer 30+ programs for real estate.
Thanks for such a wonderful blog, the article is very informative!