Frieds
We need your help in following matter:
One of our client is a real estate agent, he gets commission / brokerage from clients.Here he charges service tax and TDS is deducted on commission income @ 10%.
Now he has started ne type of business, here, he will make an agreement with developers for underwriting flats (For e,g, 50 flats @ Rs. 30 lakh per flat). He has to sell these flats at minimum price (Rs. 30 Lakh) to customers within specified time & if he can not do this, he has to buy these flats. If he sells any flat at price higher than fixed limit (E.G. 32 lakhs instead of 30 lakhs), he will get this amount (Rs. 2 lakh). In addition to this my client will also get 2% of sale value (30 lakhs) also as commission.
End customer will pay Rs. 32 lakhs to developer and developer will pay rs. 2 lakh to my client, alongwith commission amount of 2%. Sale deed will be executed between developer and end customer only.
Please help in this matter as:
TDS will be deducted by developer on hich amount.
Service Tax will be attracted on which amount
What will be position, if my client shows purchase of Rs. 30 laks and sale of Rs. 32 lakhs.
Please help.
Regards
CA. Arun Kumar Garg
CAclubindia
