V CUBE CONSTRUCTIONS
  • Home Page
  • Projects
    • Current Projects >
      • Pranavi Elite >
        • Project Details
        • Floor Plan
        • Work Photos
        • Highlights
        • Specifications
        • Route Map
    • Completed Projects >
      • Varsha Elite >
        • Project Details
        • Floor Plan
        • Work Photos
        • Highlights
        • Specifications
        • Route Map
      • Aasritha Paradise >
        • Project Details
        • Work Photos
        • Floor Plan
      • Sunrise Towers >
        • Project Details
        • Work Photos
        • Floor Plan
      • Krishna Teja Home
      • Kanakadurga Nilayam
      • House at Kanuru
  • Knowledge Hub
    • Construction Practices >
      • Project Management
      • Rod Bending Practices
    • New Home Buyer Guide >
      • Advance Booking A Flat - Good or Bad
      • Analysis of Construction Materials
      • Analysis of Construction Practices
      • Analysis of Construction Specifications
    • General Information >
      • Bank Home Loan Guide
      • Taxes while purchasing flat
      • Home Loan - Daily Rest Method
  • Gallery
    • Project Photos >
      • Varsha Elite Gallery
      • Aasritha Paradise Gallery
      • Sunrise Towers Gallery
      • Kanuru House Gallery
    • Work Photos
    • Misc Photos >
      • CREDAI SouthCon'24
      • CREDAI Vijayawada MC2023-25 Installation
      • CREDAI NATCON Dubai 2022
      • CREDAI Property Show 2022
      • CREDAI Property Show 2018
  • About Us
  • Contact Us

Taxes - During Flat Purchase

Last Update - 15-April-2021
Purpose of the article: 90% of new flat buyers opt for bank home loans, either to meet investment deficits or to get tax benefits. In order to avail maximum amount from bank, customers make flat purchase and followed by work contract agreement.
This article tries to give an overview of different taxes(and its calculation) to be paid while purchasing flat.
Assumptions for purpose of calculations:
1. Total flat purchase cost - 38 Lakh
2. Sale deed amount as per registration department - 20 Lakh,  Extra works agreement to bank - 18 Lakh
3. Bank loan amount availed - 80% of purchase cost = 30 Lakh
(A) - Registration Charges - by State Government :
Registration charges in Andhra Pradesh as on 1-April-2021 - 7.5% of sale deed amount
                                  (7.5% = 5% stamp duty + 1.5% transfer duty + 1% registration fees)
Registration charges - 7.5% of 20 Lakh = Rs. 1,50,000/-
* Please note that documentation charges and other formalities are extra to this.
(B) - GST - by Central Government :
From April-2019 onwards, GST is charged as below for under-construction flat purchases.
- Flat plinth area is less than 90 sq.mtrs or 990 sq.fts  (mostly 2BHK)
GST Charges - 1% of sale deed amount = 1% of 20 Lakh = Rs. 20,000/-
- Flat plinth area is more than 90 sq.mtrs or 990 sq.fts  (mostly 3BHK)
GST Charges - 5% of sale deed amount = 5% of 20 Lakh = Rs. 1,00,000/-
(C) - Other Govt Taxes :
Electrical Connection Deposit and Transformer charges - 35,000/-
Labour CESS charges - 15,000/-
Documentation and formality charges - 20,000/-
(D) - Home Loan Charges by Bank (around 30 Lakh loan) :
Loan processing fee -  0.4% of loan + GST - Min.10000/- to Max.25000/-
Legal Opinion and Valuation charges - 10,000/-
Flat Mortgage charges - 0.5% of loan + 400/-  = 15,400/-

Property insurance (mandatory as per RBI) -  around 25,000/-
​
Gross Total of Taxes on 20 Lakh property purchase - for 2BHK = around Rs. 2,50,000/-
Gross Total of Taxes on 20 Lakh property purchase - for 3BHK = around Rs. 3,30,000/-
Bank loan charges - around 50,000/-

Before GST implementation (i.e., before July-2017),
VAT (1.25%) + Service Tax(3.75%) = Total 5% used to be charged.
VAT & Service Tax on 20 Lakh = 5% of 20 Lakh = 1,00,000/-
​
Afterword: Please note that tax amounts are proportionate to sale deed amount. If land rates are increased by 40%, then total taxes to be paid will also increase by 40%. State Government increases land registration values periodically (once in a year or 2 years). It is better to complete the transaction before land rates increased.
Proudly powered by Weebly