Real estate developers and construction companies face unique tax and accounting complexities. Here's how we help you navigate them.
Tracking costs, revenues, and profitability for multiple ongoing projects with different completion stages and funding sources.
Percentage of completion method, determining performance obligations, and recognizing revenue as construction progresses.
Separate project accounts, escrow management, quarterly reporting, and ensuring 70% fund utilization for registered projects.
Determining nature of income from land sales, optimizing tax under Section 54/54F, and structuring transactions efficiently.
Managing TDS under Section 194-IA/IB/IC for buyer payments, contractor bills, and ensuring proper compliance documentation.
Complex taxation of land and construction sharing arrangements, stamp duty implications, and accounting for shared projects.
Comprehensive accounting and tax advisory for developers, builders, and construction companies
Specialized solutions for property developers and construction businesses
Accelerate depreciation for commercial properties
Tax-efficient joint development agreement advisory
Like-kind exchange planning for property transactions
Bank loan facilitation and working capital advisory
Financial modeling and viability assessment
Land acquisition and property purchase DD
Property businesses are project-driven, with long cycles, customer advances and land arrangements that span financial years. Tax outcomes depend on how each project is structured and booked.
Under RERA, a share of buyer receipts must be kept in a designated project bank account and used for that project. Books must show project-wise receipts and spend, and a chartered accountant certifies withdrawals.
Supply of under-construction property is generally taxable, while sale after the completion certificate is generally outside GST. The treatment of land value and credit eligibility depends on the scheme in force, so we confirm it at the project start.
Accounting standards allow revenue to be recognised over time or at a point in time, depending on when control passes, and the choice changes profit by year. We document the method and keep it consistent with the tax return.
Landowners and developers share built-up area or revenue. The tax in the landowner's hands, the GST on development rights and the timing of income all need separate review.
A buyer deducts tax on the purchase of immovable property above the specified value, and the deduction is reported through a challan-cum-statement. Developers should check that buyers have deposited tax before registration.
Many developers use separate companies or LLPs for each project. Each needs its own books, returns and audit, and intercompany balances should be documented.
We maintain project ledgers so that every receipt, cost and tax entry can be traced to a project. Our indirect tax team reviews GST on each scheme, and the GST calculator gives a quick check on invoice values.
Generally, no GST applies when the sale happens after the completion certificate is issued. Under-construction property is generally taxable. The exact position should be confirmed for the specific transaction.
RERA requires a separate bank account for each project, with a share of buyer receipts deposited and used only for that project. The books must follow the same project boundaries.
Under the applicable accounting standard, depending on whether control transfers over time or at a point in time. The policy must be disclosed and applied consistently.
It can create tax for both the landowner and the developer, and GST may apply to the development rights. The result depends on how the agreement is drafted, so it should be reviewed before signing.
The same as any other company or LLP: books, GST, TDS, income-tax returns and audit. It must also close out intercompany balances at completion. Use our contact page to ask for a project review.