Está en la página 1de 8

REAL ESTATE

BUSINESS
AUDITING


TREATMENT OF REAL ESTATE TRANSACTIONS, SERVICE
TAX TREATMENT ETC.

deepes007.blogspot.in
2/5/2014

Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
"

Suggestions to deepesh427@yahoo.co.in Page 2

AUDITING OF REAL ESTATE BUSINESS

Real Estate tansa#tions in#l$des tansa#tions elated to land
%&et&e it is'
(die#t sale o) a pat o) land
(sale a)te de*elop!ent +#onst$#tion, o) land
(gi*en on lease et#.

One o) t&e !ost pop$la and po)itable b$siness t&ese da-s is
eal estate, t&e #o!panies o peson engaged in s$#& b$siness
is #alled b$ilde . de*elope o a deale.
All t&e people %e see ao$nd %&o ae engaged in !a/ing )lats,
apat!ents . to%ns&ips ae b$ilde . de*elopes0eal estate
deales.

Fo sale o) pat o) land' sale deed is !ain poo)
%&ile in #ase o)
1e*elop!ent and t&en sale' agee!ent to sell is !ade at ti!e
o) boo/ing o) poposed st$#t$e and t&en sale deed is !ade
a)te de*elop!ent.

So!e people e2$ate t&e #onst$#tion o de*elop!ent b$siness
%it& !an$)a#t$ing b$t it is )a di))eent )o! !an$)a#t$ing
bot& in geneal . legal te!s.


Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
3

Suggestions to deepesh427@yahoo.co.in Page 3

Man- t-pe o) ta4es ae appli#able on de*elope s$#& as'
a, In#o!e ta4
b, Se*i#e ta4
#, 5CT +a )o! o) sales ta4,
d, Labo$ Cess

In #ase o) eal estate de*elope . b$ilde, de*elop!ent is done
t&o$g& t%o %a-s'
i, On land o%ned b- de*elope
ii, On land o%ned b- so!e ot&e peson +1e*elop!ent
agee!ent,

In !ost #ases a de*elope ta/es t&e a#t$al #onst$#tion %o/
b- itsel) %it& t&e &elp o) o%n !ateial and labo$ eso$#es b$t
in so!e #ases %o/s #onta#t is enteed b- de*elope %it&
so!e ot&e peson +#onta#to,. And no% t&e #onta#to is
esponsible )o t&e #onst$#tion %o/.

Read agee!ent )o sale )o t&e te!s and #onditions, !anne
and ti!e o) pa-!ent, sale #onsideation, inteest to be #&aged
on late pa-!ent +i) an-,.







Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
6

Suggestions to deepesh427@yahoo.co.in Page 4

EXPENDITURE
7. C&e#/ i) an- e4pense e4ists %&i#& is #&aged $nde indie#t e4penses b$t
a#t$all- belongs to die#t e4pense.

". In #ase o) eal estate t&ee ae so!e e4penses %&i#& see!s to be
indie#t e4penses b$t a#t$all- teated as 1ie#t e4penses i) allo#able to
di))eent $nning po8e#ts e4a!ple'
i, 9o#&$e e4pense o) a pati#$la po8e#t
ii, Sala- paid 0pa-able to a pati#$la site sta)).
iii, Ta*elling0#on*e-an#e o) a pati#$la site sta))

3. C&e#/ %&et&e an- e4pense t&at is e2$ied to be #apitalised, is %ongl-
#&aged to :o)it . Loss. +T&is #ase is )o$nd !ainl- in #ase o) plant .
!a#&ine- and in eal estate b$siness it is also #o!!on in #ase o)
b$ildings,

6. 1i))eent E4penses !$st be #ategoised $nde pope ;t-pe< o)
e4pendit$e s$#& as'
:inting . stationa-
Ad*etise!ent e4pense
Legal . :o)). E4pense

=. 1ie#t e4penses in#$ed !$st be ta/en as sto#/ in tade %&et&e
(Ra% !ateial at site
(5o/ in :ogess
(Finis&ed goods.








Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
=

Suggestions to deepesh427@yahoo.co.in Page 5

REVENUE RECOGNITION
7. In #ase o) eal estate b$siness ad*an#es ae e#ei*ed )o! t&e #$sto!es
be)oe t&e #onst$#tion is stated o #o!pleted. T&e sa!e !$st be
teated as ad*an#es $nde #$ent liabilities.

". Re*en$e e#ognition !$st be done as pe >?$idan#e notes on
a##o$nting )o eal estate b$siness +"07",@ %&i#& sa-s '
Follo%ing tests need to be #aied be)oe t&e e*en$e e#ognition'
i, 5&et&e #onst$#tion . de*elop!ent #ost in#$ed is at least "=A
o) t&e total esti!ated #onst$#tion and de*elop!ent #ost. +Land
#ost not in#l$ded,
ii, 5&et&e sale agee!ent &as been !ade )o at least "=A o) total
saleable aea.
iii, 5&et&e e*en$e &as been ealised )o at least 70A o) total
agee!ents !ade.
I) all t&e #onditions ae satis)ied t&en e*en$e is needed to be
e#ognised in po)it . loss a##o$nt.

Note : Condition/Tet need to !e "#e"$ed %o& e'"# (&o)e"t
e('&'te*+,

No%, i) all t&e #onditions ae satis)ied )o a po8e#t, total esti!ated #ost
and total #ost in#$ed +in#l$ding land, is e2$ied.
:e#entage o) #o!pletion' Tot'* in"-&&ed/Tot'* eti.'ted / 100

No% t&e pe#entage o) #o!pletion is !$ltiplied %it& total a!o$nt )o
%&i#& agee!ents &a*e been !ade'
Re0en-e to !e &e"o1nied B :e#entage o) #o!p. C A!o$nt )o %&i#&
agee!ents &a*e been !ade.




Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
D

Suggestions to deepesh427@yahoo.co.in Page 6

SERVICE TAX:
7. A 1e*elope is e2$ied to #&age se*i#e ta4 i) an- ad*an#e is e#ei*ed
)o! t&e #$sto!es %&et&e agee!ent to sell is !ade o not.

". Se*i#e ta4 is not e2$ied i) sale is !ade a)te #o!pletion #eti)i#ate &as
been obtained )o! go*t. A$t&oit-. +9$t as !entioned ealie in !ost
#ases sin#e e#eipts ae in ad*an#e )o! t&e #$sto!es be)oe t&e
#onst$#tion, se*i#e ta4 is e2$ied to be #&aged,

3. Fo se*i#e ta4 on sale o) )lat in a #o!ple4 +i.e. ot&e t&an single
esidential $nit %&i#& is e4e!pt, '

Conditions'
i, Floo aea less t&an "000 s2. Feet
ii, Val$e as pe agee!ent less t&an 7#.

I) bot& #onditions ae satis)ied abate!ent o) 7=A o) #&ageable *al$e
)o! t&e #$sto!e.
I) an- o) t&e abo*e #ondition is not satis)ied abate!ent 70A.

6. In #ase o) #o!!e#ial $nit, abate!ent is 70A o) t&e *al$e o) a!o$nt
e#ei*ed )o! #$sto!e.

=. 1e*elope #an a*ail CENVAT inp$t o) se*i#e ta4 paid on inp$t se*i#es
and e4#ise d$t- paid on #apital goods.
E4#ise on inp$t goods +i.e. #ons$!ed in #onst$#tion, is not a*ailable i)
abate!ent !entioned abo*e is ta/en.
D. A de*elope !a- be e2$ied to pa- se*i#e ta4 e0en i% t#e t-&no0e& i
ni*'
S!all se*i#e po*ide bene)it is a*ailable )o t$no*e less t&an 70 la/&s
and
it !a- be possible t&at no t$no*e is e#ognised -et b$t e&0i"e t'2 ('id
i ('id on 'd0'n"e '.o-nt .o&e t#'n 10 *'$#,
Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
7

Suggestions to deepesh427@yahoo.co.in Page 7

7. A eal estate de*elope is also e2$ied to pa- se*i#e ta4 on inp$t
se*i#es -nde& &e0e&e "#'&1e !e#&anis! on )ollo%ing se*i#es'
(Se*i#es )o! ad*o#ate o )i! o) ad*o#ate
(5o/s Conta#t
(S$ppl- o) !anpo%e
(Sponsos&ip se*i#es

E. In #ase o) %o/s #onta#t se*i#e is #&aged on se*i#e potion'

( I% e('&'te*+ identi%i'!*e : on e('&'te e&0i"e '.o-nt,
( I% not e('&'te*+ identi%i'!*e3 e&0i"e (o&tion i:
i, In oiginal %o/s F 60A o) total a!o$nt
ii, In Repai and !aintenan#e(70A o) total
iii, In ot&es F D0A o) total a!o$nt


ESI 4 P5:
7. C&e#/ t&e appli#abilit- o) ESI . :F on t&e oganisation.

". C&e#/ %&et&e ESI . :F &a*e been popel- ded$#ted )o! sala- and
deposited along %it& e!plo-e<s s&ae.

65ind t#e ESI P5 *in$ '0'i*'!*e in t#e (ot7











Find and ead !oe on
REAL ESTATE BUSINESS AUDITING
E

Suggestions to deepesh427@yahoo.co.in Page 8

ASSETS
7. C&e#/ %&et&e land and ot&e 5I: is popel- #ategoised as Sto#/(in(
tade and not $nde In*est!ent.

". I) an- in*est!ent is #on*eted to sto#/(in(tade, it gi*es ise to #apital
gain in -ea %&en s$#& sto#/ is sold.

3. C&e#/ %&et&e an- !a8o epai and !aintenan#e0eno*ation0alteation
to o))i#e b$ilding is #&aged to :o)it and loss, #oe#t teat!ent is
#apitalisation o) s$#& e4pense.

6. C&e#/ Se*i#e ta4 inp$t is popel- a##o$nted0boo/ed and also $tilised
at pope inte*als0 d$e date.

=. Also CGECH t&at t&e inp$t )o se*i#e ta4 $nde e*ese #&aged is
boo/ed onl- on t&e a#t$al deposit o) s$#& a!o$nt to go*t.

LIABILITIES
7. C&e#/ t&at ad*an#es )o! #$sto!es &a*e been popel- a##o$nted and
se*i#es ta4 &as also been #olle#ted t&ee on.

". C&e#/ %&et&e T1S and se*i#e ta4 &a*e been popel- deposited on d$e
date.

3. Se*i#e ta4 liabilit- $nde e*ese #&age !$st be sepaatel- a##o$nted
)o! t&e die#t se*i#e ta4 liabilit-.

6. Also #&e#/ 5CT and labo$ #ess ae deposited popel- on d$e date.

=. C&e#/ #o!plian#e o) t&e #o!pan- %it& se#tion 7E0, 7E7, 7E" . 7E= o)
#o!panies a#t "073 and se#tion =EA +along %it& deposit a##eptan#e
$les, o) Co!panies a#t 7I=D.

También podría gustarte