Taxation for Real Estate Developer in India
Real estate developers in India are subject to various taxes, including:
1. Income Tax: Taxed as business income, developers can deduct expenses related to property development.
2. Capital Gains Tax:
Short-term Capital Gains (STCG): Properties sold within 24 months are taxed at the individual's income tax slab rates.
Long-term Capital Gains (LTCG): Properties held for more than 24 months are taxed at either 12.5% without indexation or 20% with indexation benefits, depending on the choice made by the taxpayer after July 23, 2024.
3. Goods and Services Tax (GST): A GST of 12% applies to under-construction properties, while completed properties are exempt if a Completion Certificate is issued.
4. Property Tax: Local authorities impose property tax based on the property's assessed value.
5. Stamp Duty: Charged on property transactions, rates vary by state.
6. TDS on Property Sale: A Tax Deducted at Source (TDS) of 1% is applicable on the sale of property exceeding ?50 lakhs.
7. Wealth Tax: Applicable for individuals with net wealth exceeding ?30 lakhs, though it has been abolished since FY 2015-16.