As per Real Estate (Regulation and Development) Act, 2016, “Carpet Area” means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under service shafts, exclusive balcony or veranda area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.

The Registration Act, 1908, the Transfer of Property Act, 1882 and the Real Estate (Regulation and Development) Act, 2016 mandates the registration of an agreement for sale of an immovable property. By registering the agreement for sale of an immovable property, it becomes a permanent public record. Further, a person is considered as the legal owner of an immovable property only after he gets such property registered in his name.

Capital Gains are exempt if a person purchases a new flat within two years of the date of sale of the original flat and invests the entire amount of capital gained into the new flat. However, the same is subject to the provisions of the Income Tax Act, 1961. Customers are requested to consult his/her Chartered Accountant in this regard.

A project which meets the following conditions shall be considered as an ongoing project.

Commencement certificate for the project, where required, has been issued by the competent authority on or before 31stMarch, 2019, and it is certified by a registered architect, chartered engineer or a licensed surveyor that construction of the project has started (i.e. earthwork for site preparation for the project has been completed and excavation for foundation has started) on or before 31st March, 2019.

Where commencement certificate in 3 respect of the project, is not required to be issued by the competent authority, it is to be certified by any of the authorities specified in (a) above that construction of the project has started on or before the 31st March, 2019.

Completion certificate has not been issued or first occupation of the project has not taken place on or before the 31st March, 2019.

Apartments of the project have been, partly or wholly, booked on or before 31st March, 2019.

With effect from 01-04-2019, effective rate of GST applicable on construction of residential apartments by promoters in areal estate project are,

For construction of affordable residential apartments –1% without ITC on total consideration.

For construction of residential apartments other than affordable residential apartments –5% without ITC on total consideration.

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The above rates are applicable for projects which commences on or after 01-04-2019 as well as in on- going projects. However in case of on-going project, the promoter has an option to pay GST at the old rates i.e. at the effective rate of 8% on affordable residential apartments and effective rate of 12% on other than affordable residential apartments and, consequently, to avail permissible credit of inputs taxes; in such cases the promoter is also expected to pass the benefit of the credit availed by him to the buyers. To continue with the old rates, the promoter/ builder has to exercise one time option in the prescribed form and submit the same manually to the jurisdictional Commissioner within prescribed date.

Affordable residential apartment is a residential apartment in a project which commences on or after 01- 04-2019, or in an ongoing project in respect of which the promoter has opted for new rate of 1% (effective from 01-04-2019) having carpet area upto 60 square meter in metropolitan cities and 90 square meter in cities or towns other than metropolitan cities and the gross amount charged for which, by the builder is not more than forty five lakhs rupees.