What is the biggest challenge before Indian real estate?


The real estate industry has to bear the load of three types of taxes. The union government levies service tax. The government should withdraw service tax if it wants to give a fillip to this sector. The effective rate of tax should be reduced.

The real estate sector gives service tax at two stages. When the builder builds a house, he pays service tax on the bills of architects and those involved in the construction. Now he has to take service tax from those who buy his flats. The builder is treated as a contractor if the customer is buying a house during the period of construction.

Besides service tax, the industry pays two types of tax -- VAT and stamp duty -- levied by the state government. So the industry has to bear the load of three types of taxes.

- Moneycontrol


But are these factors really responsible for the escalating propperty prices in India. What is your say on these?
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