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Service tax on land owners share of flats from jda
hi, i am receiving some apartments from builder as per joint development agreement in another 2-3 months. i do not intend to sell any of them. i am aware i am liable for long term capital gain. but builder is saying i need to pay 3.5% service tax within a month of getting possession certificate from him. the value will be based on builtup area i am receiving at guidance value at registrar office. is it true? thought there is service tax only if i sell my share before construction is complete.
If I need to pay service tax, can it be done as an individual? Under the impression, service tax is paid by companies which are registered to pay service tax!
Replies (3)
Yes, service tax is applicable over the land owner for the services provided by the developer. Generally cost of construction of the built up area received by land owner is taken as cost of services.
how will I know cost of construction? Should I get some declaration from builder reagarding cost of construction. So will it be 15% on 40% of construxtion cost?
Yes, builder can give declaration based on his books of accounts as ratio of land owners share to total constructed area.
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