Let me tell you: Is service tax applicable on resale flat? No, service tax is not applicable on the resale of flats in India. Service tax was a central levy imposed on services provided, and while it did apply to certain real estate transactions in the past, it was specifically applicable only to under construction properties where the builder was providing construction services.
Is Service Tax Applicable on Resale Flat?
The resale of a completed flat does not involve any service component that would attract service tax. This tax regime was replaced by the Goods and Services Tax (GST) in July 2017, which now governs most indirect taxes including those on real estate transactions.
For resale flats, the buyer is only liable to pay stamp duty and registration charges as per state laws, along with capital gains tax if applicable to the seller.
The confusion around service tax often arises because it was previously applicable at 4.5% (after abatement) on under-construction properties where the agreement was signed before GST implementation.
However, for resale transactions of ready-to-move-in properties, no service tax was ever applicable. Currently, even for under-construction properties, GST at 12% (1% for affordable housing) has replaced the earlier service tax structure.
It's important to note that while service tax is no longer in effect, proper documentation including the original sale agreement, possession letter, and previous ownership proofs remain crucial for resale transactions to avoid any legal complications.
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Is Service Tax Applicable On Resale Flat?
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2025-05-27T18:45:30+00:00 2025-05-28T07:23:39+00:00Comment
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