Precisely the service tax rate would be:
- House Costing below Rs 1 Crore and have carpet area less than 2000 square feet would attract tax at the rate of 12% on 25% of the total value of the residential unit which comes effectively 3%.
- While if a housing unit is either more than 2000 square feet carpet area or costs over Rs 1 crore then the tax rate will be levied on 30% of the total value, raising the effective tax to 3.6%.
- On the other hand commercial properties will continue to be levied at higher incidence of tax, irrespective of size and value.
- It should be a residential property;
- Carpet area of unit is less than 2000 sq feet; and
- The amount charged for the unit is less than Rs.1 crore.