A developer firm based in Vaishali Nagar once came to us. Their structure was a Pvt Ltd company, yet their accountant had been trying to apply individual consultant tax rules to them: filing ITR-3 and discussing the scope of Section 44AD. The problem was that being a company changed their entire tax treatment. No presumptive scheme applied to them, and no slab rates were available.
This confusion is common when people copy-paste individual broker rules onto a corporate entity. This guide is specifically for firms operating as a company or LLP, whether you are a builder company developing and selling property, or a corporate brokerage or consultancy firm earning commission or advisory fees.
What Is a Real Estate Company?
Quick Answer: What types of real estate companies exist? Two broad types exist: Developer/Builder Companies that construct and sell property (where GST applies directly on construction service), and Corporate Brokerage/Consultancy Firms that facilitate deals or provide advisory services for commission or fees. Both have entirely different GST and income tax treatment.
Real estate corporate entities generally fall under two categories:
-
Developer/Builder Company: Constructs and sells property, residential or commercial. Here GST applies directly on the construction service.
-
Corporate Brokerage/Consultancy Firm: Facilitates deals or provides advisory services, operating as a company or LLP rather than an individual proprietorship.
Both models have completely different GST treatments, and both differ entirely from individual consultants when it comes to Income Tax.
GST Registration: What Is Different for a Company?
Quick Answer: Is GST registration mandatory for real estate companies? The threshold is ₹20 lakh annual turnover (₹10 lakh for special category states). However, practically every developer company crosses this from a single property deal, making GST registration effectively mandatory from day one.
Need help with Company GST Registration? Connect here →
GST Rate Structure: Developer Company vs Consultancy Company
Quick Answer: What GST rate applies to real estate developers? Affordable housing: 1% without ITC. Non-affordable residential: 5% without ITC. Commercial property: 12% with ITC. Ready-to-move property with Occupancy Certificate (OC): 0% (GST not applicable).
1. For Developer / Builder Companies
|
Property Type |
GST Rate |
ITC Available? |
|
Affordable housing (up to ₹45 lakh, carpet area 60/90 sqm) |
1% |
No |
|
Non-affordable residential |
5% |
No |
|
Commercial (office, shop, retail) |
12% |
Yes |
|
Ready-to-move (Occupancy Certificate issued) |
0% |
Not applicable |
Note: While calculating GST, 1/3rd of total consideration is deducted as land value, and tax applies only on the remaining 2/3rd. Since April 2019, developers opting for the 1%/5% scheme cannot claim Input Tax Credit (ITC). GST paid on construction materials gets absorbed into cost.
2. For Corporate Brokerage / Consultancy Companies
If your company earns commission or advisory fees and is not a developer, the tax rate is 18%. The SAC codes are identical to individual consultants (997221-997224 for commission, 998312 for advisory). Full ITC is available on normal business expenses.
Input Tax Credit (ITC): Developer vs Consultancy
Quick Answer: Can developer companies claim ITC on construction materials? No, if they operate under the 1%/5% scheme. GST paid on cement, steel, and labor cannot be claimed as ITC. Consultancy companies billing at 18%, however, can claim ITC on normal business expenses like office rent and software.
Warning: Developers who have chosen the 1%/5% scheme and are still claiming ITC on construction inputs are making a serious compliance error that can attract scrutiny and demand notices from the tax department.
GST Return Filing Requirements
Quick Answer: Which GST returns must a real estate company file? GSTR-1 and GSTR-3B (monthly or quarterly under QRMP). GSTR-9 annual return is mandatory when turnover exceeds ₹2 crore. GSTR-9C reconciliation statement is required when turnover crosses ₹5 crore.
|
Return |
Frequency |
Applicability |
|
GSTR-1 |
Monthly (11th) or QRMP quarterly |
All registered taxpayers |
|
GSTR-3B |
Monthly (20th) or QRMP quarterly |
All registered taxpayers |
|
GSTR-9 |
Annually (by 31 December) |
Turnover above ₹2 crore |
|
GSTR-9C |
Annually (by 31 December) |
Turnover above ₹5 crore |
RERA and GST: Separate Obligations
Quick Answer: Does RERA registration remove GST obligations for developers? No. RERA and GST are completely separate laws. RERA covers project registration and escrow accounts under state authorities. GST is a central/state indirect tax. A developer company must maintain both compliance tracks in parallel.
Income Tax: Where the Biggest Difference Lies
Quick Answer: Can a real estate company use presumptive taxation under Section 44AD or 44ADA? No. Neither 44AD nor 44ADA applies to companies or LLPs. These schemes exist only for individuals, HUFs, and partnership firms (excluding LLPs). Companies and LLPs must compute income under regular provisions at flat corporate rates.
Corporate Tax Rates Overview
|
Entity Type |
Tax Rate |
|
Partnership Firm / LLP |
Flat 30% |
|
Domestic Company (standard) |
30% |
|
Domestic Company (turnover ≤ ₹400 crore) |
25% |
|
Domestic Company opting Section 115BAA |
22% (effective ~25.17% with surcharge & cess) |
ITR Form Requirements: Companies file ITR-6. Partnership firms and LLPs file ITR-5. Individual consultant forms like ITR-3 and ITR-4 do not apply to corporate structures.
TDS: A Corporate Company Act as a Deductor
Quick Answer: What TDS obligations does a real estate company have as a deductor? Companies must deduct TDS on agent commissions (194H), consultant fees (194J), contractor payments (194C), and property purchases over ₹50 lakh (194-IA). They must also file quarterly TDS returns (Form 26Q/27Q).
|
Payment Type |
Section |
Rate |
Company's Role |
|
Agent/broker commission |
194H |
2% |
Company is deductor |
|
Consultant/advisor fee |
194J |
10% / 2% |
Company is deductor |
|
Contractor for construction payment |
194C |
1% / 2% |
Company is deductor |
|
Property purchase (above ₹50 lakh) |
194-IA |
1% |
Buyer company is deductor |
ROC / MCA Compliance Framework
Quick Answer: What ROC filings does a real estate company need to do annually? Companies must file AOC-4 (financial statements), MGT-7/7A (annual return), DIR-3 KYC for directors, hold at least 4 board meetings annually, and complete a mandatory statutory audit. LLPs must file Form 8 and Form 11 annually.
|
Filing |
Frequency |
Purpose |
|
AOC-4 |
Annually |
Financial statements filing with ROC |
|
MGT-7 / MGT-7A |
Annually |
Annual return filing |
|
DIR-3 KYC |
Annually |
Director KYC verification |
|
Board Meetings |
Minimum 4 per year |
Statutory requirement under Companies Act |
|
Statutory Audit |
Annually |
Mandatory for all companies regardless of turnover |
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Comparison: Individual Consultant vs. Real Estate Company
|
Factor |
Individual Consultant |
Real Estate Company |
|
Presumptive scheme |
Possible in some cases |
Never applicable |
|
Tax rate |
Slab-based (5% to 30%) |
Flat (22% / 25% / 30%) |
|
ITR Form |
ITR-3 / ITR-4 |
ITR-6 |
|
TDS role |
Usually deductee |
Both deductor and deductee |
|
Extra compliance |
None |
ROC / MCA filings |
|
GSTR-9C requirement |
Rarely applicable |
Applies once turnover crosses ₹5 crore |
Common Compliance Mistakes to Avoid
-
Trying to apply individual consultant rules like Section 44AD/44ADA to a company.
-
Wrongly attempting to claim ITC under the developer 1%/5% scheme.
-
Forgetting to deduct TDS while paying agents, contractors, and landowners.
-
Treating ROC filings (AOC-4, MGT-7) as separate from main tax obligations and missing deadlines.
-
Assuming RERA compliance substitutes for GST compliance or vice versa.
Annual Compliance Calendar for Real Estate Companies
|
Task |
Due Date |
|
GSTR-1 / GSTR-3B |
Monthly (11th/20th) or QRMP quarterly |
|
TDS Deposit (194H/194J/194C/194-IA) |
7th of the month following deduction |
|
TDS Return (26Q/27Q) |
Quarterly |
|
Advance Tax |
June, September, December, March instalments |
|
ITR-6 Filing |
Generally 31 October (audit applicable cases) |
|
GSTR-9 / GSTR-9C |
31 December |
|
AOC-4 / MGT-7 (ROC) |
Within 30/60 days of AGM |
Frequently Asked Questions (FAQs)
Q1. Is GST registration mandatory for a real estate company?
Yes, as soon as turnover crosses ₹20 lakh. For developer companies, a single transaction usually exceeds this threshold.
Q2. What is the GST rate for a developer company?
Affordable housing: 1%. Non-affordable residential: 5% (both without ITC). Commercial property: 12% (with ITC).
Q3. Can a real estate company use 44AD or 44ADA?
No. Both schemes apply only to individuals, HUFs, and partnership firms (not LLPs). Companies and LLPs are completely excluded.
Q4. Which ITR form does a real estate company file?
Companies file ITR-6. Partnership firms and LLPs file ITR-5.
Q5. What is the tax rate on a real estate company?
Standard 30%, or 25% if turnover is below ₹400 crore, or flat 22% (effective ~25.17%) under Section 115BAA.
Q6. Does a developer company get ITC?
Not under the 1%/5% residential scheme. However, ITC is available on 12% commercial construction and on normal 18% consultancy services.
Q7. Which TDS sections must a real estate company manage?
194H (agent commission), 194J (consultant fee), 194C (contractor payment), and 194-IA (1% on property purchases above ₹50 lakh).
Q8. What ROC filings are required?
AOC-4 and MGT-7 annually, DIR-3 KYC for directors, and for LLPs: Form 8 and Form 11.
Q9. Is RERA registration separate from GST?
Yes, they are completely separate obligations. RERA is a state regulatory compliance requirement; GST is an indirect tax. Both must be maintained in parallel.
Q10. When is GSTR-9C required?
When turnover exceeds ₹5 crore. This reconciliation statement rarely applies to individual consultants but is common for developer companies.
Need GST or ROC compliance help for your real estate company? Talk to our team →
Author: This article was researched and published by Sanju Meena, Digital Marketer and SEO Executive at LegalDev Tax India Pvt. Ltd., who works on GST compliance content and search strategy for gstfilling.co.
Note: GST rates on construction (1%/5%/12%), corporate tax rates, and TDS thresholds change with Finance Act amendments and CBIC/CBDT notifications. Verify current figures at gst.gov.in, cbic.gov.in, and incometax.gov.in, or with a Chartered Accountant, before publishing.
