Let me help with: Is VAT applicable on resale flat? No, VAT (Value Added Tax) is not applicable on the resale of flats in India. VAT is a tax levied primarily on the sale of moveable goods and certain construction materials, but it does not apply to the transfer of immovable property like residential or commercial flats.
Is VAT Applicable on Resale Flat?
When purchasing a resale flat, the buyer is liable to pay Stamp Duty and Registration Charges (state-specific rates) on the transaction value, along with Capital Gains Tax (if applicable to the seller). However, VAT may have been paid by the original developer during the initial construction phase, as it applies to the sale of under construction properties in some states.
The confusion around VAT arises because some states previously imposed VAT on under-construction properties as part of the composite tax structure (along with Service Tax).
However, with the introduction of GST (Goods and Services Tax) in 2017, VAT on real estate was largely replaced.
Today, GST applies to under-construction properties, while resale transactions attract only stamp duty and registration fees. If the flat being resold was purchased before completion, the original buyer might have paid VAT during construction, but this does not affect the resale transaction.
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Is VAT Applicable on Resale Flat?
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2025-05-27T18:42:47+00:00 2025-05-27T18:42:49+00:00Comment
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