Burden on Flat Purchasers
Finance Minister Sri. P. Chidambaram placed the budgetary proposals before the parliament on 28/02/2005. On reading the fine print and analysis of various proposals the euphorbia generated on the day of presentation of budget has gradually disappeared Though Finance Minister has assured to look into some of proposals, which are likely to adversely effect the business he is firm that there will no major roll back. Sri. P. Chidambaram seems to be following the footsteps late Morarji Desai who taxed everything, but disguised them in flowery language.
Blow to Construction of residential Sector:
Finance Minister Sri. P. Chidambaram placed the budgetary proposals before the parliament on 28/02/2005. On reading the fine print and analysis of various proposals the euphorbia generated on the day of presentation of budget has gradually disappeared Though Finance Minister has assured to look into some of proposals, which are likely to adversely effect the business he is firm that there will no major roll back. Sri. P. Chidambaram seems to be following the footsteps late Morarji Desai who taxed everything, but disguised them in flowery language.
Blow to Construction of residential Sector:
Unfortunately the union budget has treated the construction sector badly. The union budget has included the some additional services in the service tax net; like site formation, demolition, and like services of survey of land and making maps, construction of planned residential completes with more than 12 dwelling units developed by the builder. The service tax is 10% with 2% education cess. Thus the effective tax would be 10.20%.
Not a Burden to Builder:
The service tax will be collected by the service provider, that is builder. But he will pass on the tax component to the purchaser of residential units, thus it is the end user who will ultimately suffers.
Apart from passing the service tax component to the purchaser, the builder enjoys certain tax exemptions on full profits earned in developing and building housing projects under section 80-IB of Income Tax Act. The exemptions are allowed subject to certain conditions, such as
1. The project should have a plot area of minimum one acre.
2. Residential unit should have maximum built up area of 1000 sft in Delhi, Mumbai and 1500 sft in other areas.
3. The built up area for commercial and shopping should not exceed 5% or 2000 sft whichever is less.
4. The project should have approved before 31 March 2007 and should be completed within four years from the end of the financial year in which project was approved.
Further minimum plot area requirement of one acre is waived in case of housing projects carried out in accordance with the schemes framed by central or state governments for reconstruction of or redevelopment of existing buildings and notified by the board in this behalf for redevelopment of such dwellings. The exemption is allowed for five years on 100% profits. Thus on compliance of certain conditions builder need not pay any income tax on the profits earned on construction of dwelling units; and passes on the service tax to the purchasers. So levy of service tax on flats is not a burden to the builder who coolly pockets the profits, which are exempted from income tax.
Purchaser will suffer:
The ultimate man who has to bear all the load is the enduser, who at most times might have spent all his life time earnings to have a roof over his head. Not only the service tax, but other decisions of government has exposed the purchaser to higher expenditure.
The Cabinet Committee on Economic Affairs has recently decided to allow 100% foreign direct investment in construction sector; where the minimum area to be developed is 25 acres (10 hectares) in case of serviced housing plots. Already owing to various restrictions on approval of layouts, prohibition on betterment charges in the city/town municipal areas the price of lands have increased by 50% in the last six months around the city. With allowance of 100% FDI in construction sector, the price of the land will further increase around Bangalore.
25% Duties:
In certain cases old structures have to be demolished. The lands have to be surveyed and mapped. The builder starts construction of multi-storied apartment after approval of plan. Many times each of the above activities are done by different agencies and each activity attracts services tax of 10% and education cess of 2%. The budget has proposed to exempt service providers whose gross annual turnover does not exceed 4 lakhs, but this exemption is a pittance for construction sector.
Seldom a builder / promoter prefers to construct less than 12 dwelling units. With increase in land price and levy of service tax on construction and related activities, the cost of dwelling units will increase making it not easily affordable by end users. Apart from actual purchaser price of the flat, the purchaser has to bear 10% towards Stamp Duty and Registration Charges, 4% towards sales tax, and 10.20% towards service tax and expenditure towards Katha, tax assessment etc, thus purchaser has to pay nearly 25% of purchase price towards various taxes, duties and levies. May the middle class may have to forget about owning a flat and settle for a small houses like sardine packs, without any proper facility.
Commune 1 Multistorey Apartments Area Range 765 - 1590 Sq Ft,. Located at Chandapura, Bangalore available with 1BHK, 2BHK and 3BHK Apartments.
Description:
Commune1 - Self-sufficient, Sustainable and Holistic living
Community living which was invented and nurtured by our ancestors, we at Commune, would like to bring it back at time when everyone needs it the most. The Commune - a self-sufficient, a sustainable community spread in 5 acres with abundant lung space of greenery, landscaped with aromatic & medicinal plants. A meticulously planned project having efficient design of 1, 2 and 3 bedroom apartments, very strategically located on 100 feet Chandapura-Anekal main road and very proximate to Surya City. It is just a 10 minute drive from the Electronic City and well connected to the City via the elevated expressway & also via NICE Corridor.
Amenities & facilities – Everyone looks for a healthy and lively environment, we at Commune provide one and all starting from Sports facilities to Shopping centre, Amphitheatre, Aromatic parks, Club House with Library and much more. For the young ones it provides multiple sporting facilities like Badminton, Tennis, Basketball, Cricket, Skating rink, Swimming pool, Rock climbing and much more, for kids a learning environment with play areas, and for the elderly it provides an environment of cooperation and inclusiveness. A “Friends & Family” sit out zone on every floor makes a sheer difference.
Community living which was invented and nurtured by our ancestors, we at Commune, would like to bring it back at time when everyone needs it the most. The Commune - a self-sufficient, a sustainable community spread in 5 acres with abundant lung space of greenery, landscaped with aromatic & medicinal plants. A meticulously planned project having efficient design of 1, 2 and 3 bedroom apartments, very strategically located on 100 feet Chandapura-Anekal main road and very proximate to Surya City. It is just a 10 minute drive from the Electronic City and well connected to the City via the elevated expressway & also via NICE Corridor.
Amenities & facilities – Everyone looks for a healthy and lively environment, we at Commune provide one and all starting from Sports facilities to Shopping centre, Amphitheatre, Aromatic parks, Club House with Library and much more. For the young ones it provides multiple sporting facilities like Badminton, Tennis, Basketball, Cricket, Skating rink, Swimming pool, Rock climbing and much more, for kids a learning environment with play areas, and for the elderly it provides an environment of cooperation and inclusiveness. A “Friends & Family” sit out zone on every floor makes a sheer difference.
The Commune 1 has all the facilities you'd want in a living environment. From sports facilities to Shopping Center, Amphitheatre, Club House and much more.
Friends & Family Theme – which is offered to a group of 8 families to share & enjoy the family togetherness at sit outs provided on each floor.
Construction technology – We would construct buildings using the latest technology, which not only allows us to plan & target the project delivery date but also delivers the project in far lesser time as compared with conventional way with a better finish. This technology ensures and leads to safe concrete structures with stringent quality tolerances. Commune team have done extensive research on affordable homes and are poised to deliver such multiple projects without compromising on quality & specifications.
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