Dealer discount theory?? - Indian Real Estate Forum

realbad · 13-03-10

Gentlemen,
Here I'm putting a few queries before you being a newbie to this line. Hope to get some useful response.

1. How the dealer discount is being disbursed? Is it adjusted with the payment made after the allotment? Or does it come as pure cash back?
2. This cash back is completely from the dealer or the builder has some hand to it?
3. They say the discount is taxable? Can somebody put some light on it? Also whether the tax will be deducted beforehand or once it is received?
4. Usually how much time do they take in refunding?

Thanks in advance,
RB.

wornsphinc · 13-03-10

First of all I have recently brought an apartment in Noida and I spoke to lot of brokers in the process of doing so. This is my understanding of how this thing works, but I may be wrong......

Dealers/brokers are given a commission to sell apartments in a project. The commission is more if they achieve a milestone like 50, 100, 150 flats. Brokers give a discount on the price published by the builder to get more sales, so that u book the house through them. However the price written on the application form is normally the price published by the builder. The gives you a note on the company's letter head that he would give you a discount [ranges from 2% to 10% of BSP]. However the cheque would be given to you when 40% of the payment has been made to the builder by you. The builder than releases the brokers commission and after recieving that the broker than issues you the cheque. He also deducts TDS on this ammount, as the broker has to pay Tax on this income [so he alleges].

My knowledge is limited [hoping for more views], but I hope this helps.....

vishal1880 · 13-03-10

Well I can share my exp here. I booked a flat at 3C Lotus Boulevard through Unicon. I got a discount of 5% (many got more many got less). Now after some discussions with 3C the 3% of this discount part is being adjusted in the installments and the remaining 2% is to be paid back by the dealer after deducting 10% TDS

realbad · 14-03-10

Hi vishal,
even I've booked a 3C panache flat with unicon 5.0%.
got 2 separate debit note one with 4% & other with th remaining 1%.
So do I need to talk to the 3C if I want the same to be adjusted? what do u suggest...shuld I getit adjusted or disbursed.

vishal1880 · 14-03-10

Just wait for some time till ur third installment also goes thru. I am sure their must be a 3C Panache on yahoo. Join it. Make a group and discuss with their marketing. It is always adviseble to get it adjusted, you will save on 10% Tax..... if you get it disbursed it will come after deducting 10% TDS as it will be cnsidered as comission!

supra2411 · 14-03-10

Its alays advisable to ask broker to get that amount adjusted in your flat cost, instead of getting a note from the broker. You save on to things - 1) TDS 2) Registry cost

skhandelwal · 15-03-10

I booked a flat in pan oasis and got a direct 10.5% dealer discount that as directly adjusted in the BSP of the flat thereby making the BSP lesser.

realbad · 16-03-10

10.5% of dealer discount???????
r u kidding me??

kumarabhi_11 · 16-03-10

when did u book ur flat Mr. Khandelwal. Plz forward the dealer number.

vishal1880 · 16-03-10

Wait on brother soon you will see more disconts from various brokers coming in! If you went to a new construction site on a sunday earlier their used to a line of cars and brokers.... today you only see brokers...... their is a huge Supply Deman Gap in Noida and its increasing every day with a the launch of a new project.... this will frther increase now with Noida Extenstion.. so just hold on....Either prices will come down further or Construction will be delayed. Personally I wont really go for Pan Oasis atleast.

13-03-10	#1
realbad SUSPENDED Join Date: Feb 2010 Posts: 61 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	Dealer discount theory?? Gentlemen, Here I'm putting a few queries before you being a newbie to this line. Hope to get some useful response. 1. How the dealer discount is being disbursed? Is it adjusted with the payment made after the allotment? Or does it come as pure cash back? 2. This cash back is completely from the dealer or the builder has some hand to it? 3. They say the discount is taxable? Can somebody put some light on it? Also whether the tax will be deducted beforehand or once it is received? 4. Usually how much time do they take in refunding? Thanks in advance, RB.

13-03-10	#2
wornsphinc New Member Join Date: Feb 2010 Posts: 19 Thanks: 0 Thanked 0 Times in 0 Posts	Dealer Discount First of all I have recently brought an apartment in Noida and I spoke to lot of brokers in the process of doing so. This is my understanding of how this thing works, but I may be wrong...... Dealers/brokers are given a commission to sell apartments in a project. The commission is more if they achieve a milestone like 50, 100, 150 flats. Brokers give a discount on the price published by the builder to get more sales, so that u book the house through them. However the price written on the application form is normally the price published by the builder. The gives you a note on the company's letter head that he would give you a discount [ranges from 2% to 10% of BSP]. However the cheque would be given to you when 40% of the payment has been made to the builder by you. The builder than releases the brokers commission and after recieving that the broker than issues you the cheque. He also deducts TDS on this ammount, as the broker has to pay Tax on this income [so he alleges]. My knowledge is limited [hoping for more views], but I hope this helps.....

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13-03-10	#3
vishal1880 Senior Member Join Date: Oct 2009 Posts: 671 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	Well I can share my exp here. I booked a flat at 3C Lotus Boulevard through Unicon. I got a discount of 5% (many got more many got less). Now after some discussions with 3C the 3% of this discount part is being adjusted in the installments and the remaining 2% is to be paid back by the dealer after deducting 10% TDS

14-03-10	#4
realbad SUSPENDED Join Date: Feb 2010 Posts: 61 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	Hi vishal, even I've booked a 3C panache flat with unicon 5.0%. got 2 separate debit note one with 4% & other with th remaining 1%. So do I need to talk to the 3C if I want the same to be adjusted? what do u suggest...shuld I getit adjusted or disbursed.

14-03-10	#6
supra2411 New Member Join Date: Dec 2009 Posts: 29 Thanks: 0 Thanked 0 Times in 0 Posts	Its alays advisable to ask broker to get that amount adjusted in your flat cost, instead of getting a note from the broker. You save on to things - 1) TDS 2) Registry cost

15-03-10	#7
skhandelwal New Member Join Date: Nov 2009 Posts: 30 Thanks: 0 Thanked 0 Times in 0 Posts	I booked a flat in pan oasis and got a direct 10.5% dealer discount that as directly adjusted in the BSP of the flat thereby making the BSP lesser.

16-03-10	#8
realbad SUSPENDED Join Date: Feb 2010 Posts: 61 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	10.5% of dealer discount??????? r u kidding me??

16-03-10	#9
kumarabhi_11 New Member Join Date: Sep 2009 Posts: 36 Thanks: 0 Thanked 0 Times in 0 Posts	when did u book ur flat Mr. Khandelwal. Plz forward the dealer number.