GST on Real Estate Agent & Broker — 18% on Commission

Only on the commission. GST at 18% applies to the broker's fee, never to the property's sale price. For example, on a ₹1 crore deal with a 2% commission of ₹2,00,000, the 18% GST is ₹36,000 — calculated on the ₹2,00,000 commission, so the client pays ₹2,36,000 to the broker.

Real estate services provided on a fee, commission or contract basis fall under SAC 9972, taxed at 18%. This covers property brokerage, real estate consultancy, property management and appraisal when supplied as a service, as distinct from the sale of the property itself.

No. The GST 2.0 rationalisation (effective 22 September 2025) restructured many goods into a two-slab 5%/18% system, but fee-based real estate services such as brokerage, commission and consultancy remained on the 18% slab under SAC 9972. Builder-side under-construction rates (1% affordable, 5% other) also continued, while ready-to-move sales stay outside GST.

Registration is mandatory once a real estate agent's annual commission or brokerage turnover exceeds ₹20 lakh (₹10 lakh in special-category states). Below that threshold registration is not compulsory, but an agent may register voluntarily to claim Input Tax Credit and invoice B2B clients. Any inter-state supply of service can also require registration regardless of turnover.

No. The composition scheme is not available to real estate agents — it is closed to most service providers, with restaurants being the notable exception. An agent who registers therefore charges the regular 18% and files standard GST returns rather than a flat composition rate.

No. Real estate broker commission is not on the reverse-charge list under Section 9(3), so it is taxed under forward charge — the registered agent charges 18% on the invoice and pays it to the government. If the agent is unregistered and below the threshold, no GST arises on the commission.

Yes. A registered agent charging 18% GST can claim Input Tax Credit on genuine business inputs — property-portal subscriptions (99acres, MagicBricks), advertising, office rent, internet, professional fees, laptops and software. Motor cars under 13 seats are blocked under Section 17(5). The ITC offsets the 18% GST charged to clients, reducing the net tax payable.

Yes. Subscriptions to property portals and payments to advertising or digital-marketing agencies carry 18% GST and are core business inputs for a broker, so the credit is eligible provided you hold a valid tax invoice reflected in your GSTR-2B. These are often a broker's largest ITC items.

No. The sale of a completed, ready-to-move flat or a plot is a transfer of immovable property and is outside GST — it attracts stamp duty and registration charges instead. The agent's 18% commission GST still applies separately, even though the property transaction itself carries no GST.

The builder charges 1% GST (without ITC) on affordable-housing under-construction units and 5% (without ITC) on other under-construction residential units. This is the builder's GST on the property, entirely separate from the agent's 18% commission GST, and the buyer cannot claim ITC on it.

Property management — managing, letting or maintaining a client's property — is a service taxed at 18% on the management fee (SAC 9972). This applies whether the underlying property is residential or commercial; the underlying rent follows its own rules. Facility, security and housekeeping services are also 18%.

Housing-society maintenance is exempt up to ₹7,500 per month per member. If monthly maintenance exceeds ₹7,500 per member and the society's aggregate turnover is above ₹20 lakh, 18% GST applies on the full amount, not just the excess. The society can claim ITC on its inputs in that case.

TDS is deducted at 5% under Section 194H when commission or brokerage to one person exceeds ₹15,000 in a financial year. The payer deducts on the base commission, deposits it, and issues Form 16A; the agent claims the credit in their income-tax return. TDS and GST are separate — one is income-tax, the other is a value-added tax on the service.

No. TDS under Section 194H is deducted only on the base commission, not on the GST, provided the invoice shows GST as a separate line item. On a ₹2,00,000 commission plus ₹36,000 GST, TDS at 5% is ₹10,000 (5% of ₹2,00,000), so the broker receives ₹2,00,000 − ₹10,000 + ₹36,000 = ₹2,26,000.

Commission paid to a non-resident agent is not covered by Section 194H; instead TDS is deducted under Section 195 at the rate specified in the Act or the applicable DTAA, which is commonly around 10–20% depending on the nature of income and the treaty. Professional advice is recommended for cross-border commission payments.