This document contains summaries of several topics related to real estate development and accounting, including: 1) Accounting for real estate transactions is more complicated than a board game and proper recognition and reporting is required. 2) Service tax regulations for construction contractors and activities were specified under different categories until 2012 when new rules were introduced. 3) Other issues related to the construction business include partnership, whether construction is considered manufacturing, redevelopment of societies, and tax section applicability.

1. Real Estate Developer's and
Encyclopedia

2. Trainings by Vidya Bhagwat
Accounting Aspects of Construction Business
If only life were like Monopoly, where real estate transactions
form with a roll of the dice or the flick of a playing card.
Unfortunately, in real life accounting for real estate is a bit
more complicated than just adding it to the community chest.
Properly recognizing and reporting of transactions is a must.

3. Trainings by Vidya Bhagwat
Service Tax on Construction Contractor :
Before dealing with the issue of Service Tax on Construction
Activities under Taxation of Services by Negative List approach
which has come into effect with effect from 01-07-2012, it is
worthwhile to specify here that Service Tax was leviable on
construction activities under the following three categories of
services until 30-06-2012:
a) Commercial or Industrial Construction Services with effect
from 10-09-2004

4. Trainings by Vidya Bhagwat
b) Construction of Complex Services with effect from 16-06-
2005
c) Works Contract Services with effect from 01-06-2007.
However, with effect from 01-07-2012 all activities related to
construction fall within the purview of following “Declared
Services” under Section 66E of the Act:
(b) Construction of a complex, building, civil structure or a
part thereof, including a complex or building intended for sale
to a buyer, wholly or partly, except where the entire
consideration is received after issuance of completion-
certificate by the competent authority.

5. Trainings by Vidya Bhagwat
Other Issues Relating to Construction Business :
There are four important issues relating to construction
business.
They are :
• Issues with respect to partnership.
• Whether construction activity amounts to manufacture.
• Redevelopment of old societies.
• Applicability of Section 50C

6. Trainings by Vidya Bhagwat
Construction Contractor’s Agreement :
• THIS AGREEMENT made at ……………. on this ……………… day of
………. 2000, between A S/o B resident of ………………………..
(hereinafter referred to as “the Employer”, which expression
shall unless repugnant to the context or meaning thereof, be
deemed to include his heirs, legal representatives, executors
and administrators) of the ONE PART and XYZ Co. Ltd., a
company incorporated under the Companies Act, 1956 and
having its registered office at ………………………………..
(hereinafter referred to as “the Contractors” which expression
shall, unless repugnant to the context or meaning thereof, be
deemed to include its successors and assigns) of the OTHER
PART.

7. Trainings by Vidya Bhagwat
Types Of Land :

8. Trainings by Vidya Bhagwat
• Forest Lands:
India was covered with dense forests in primitive ages.
More and more lands were needed for agriculture, settlement
industry, roads etc. with the growth of population. So man
utilized land by cutting down and cleaning the forests in order
to fulfill his growing needs. Now only about 22% of the total
land area of our country is covered with forests.
• Land for Agriculture or Farm Lands:
India is primarily an agricultural country. About 55% of
the total land areas are used for growing food-crops,
vegetables, cash crops and fruit. Food-crops are grown on
about 45% of land out of the total 55% under cultivation.
Vegetables and fruit are grown on the rest of the lands and
some lands are left without any cultivation occasionally.

9. Trainings by Vidya Bhagwat
• Agricultural land :
Indian people are mainly employed in agricultural
activities thus agricultural land is almost 54.7% of the total
landmass. The agricultural lands are located on the outskirts
of the Metro cities. Usually the agricultural land shares space
with the industrial areas outside the city. There are
agricultural lands in almost all the states of India.
• Barren Land :
Within the landmass of India, mainly the land areas of
Rajasthan, parts of Jammu, Leh, and parts where snowfall
prevent any cultivation are barren.

10. Trainings by Vidya Bhagwat
• Real estate lands :
Real estate lands are growing at a tremendous rate in
India. All metro cities have huge boom of real estate properties,
due to the growth of economy, new industries, information
technology and business outsourcing. With the people becoming
mobile due to transferable jobs, the growth of houses and
apartments have increased manifold all over India.

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Agricultural Land - its Uses and Conversion :
Factors that Determine Approval for Change of Land Use :
Generally, there are certain factors that the Government
considers while approving the change of land use. They are:
1. Public interest
2. Use of land
3. Acquisition hierarchy
4. Compensation

12. Trainings by Vidya Bhagwat
Land Conversion Table :

13. Trainings by Vidya Bhagwat
What is Transferable Development Right?
transferable development rights (TDR) :
A zoning and land planning tool often used to preserve
undeveloped or culturally significant areas. Typically, the local
government will identify an area it wants to retain in a natural
state, such as farmland, called the sending area. Government
will also identify an area in need of development, usually
through rehabilitation, called the receiving area. To meet
those two goals—preservation one place, development in
another—government will buy development rights from the
farmers, for example. The farmers will agree to restrict their
land so it cannot be developed. In return, they will receive
something in the nature of credits that allow zoning variances
in the receiving along each step of the way.

14. Trainings by Vidya Bhagwat
Service Tax: Basic Concepts and Routine
Procedure :
• Introduction to service tax:
Like the tax on sale of goods, service tax is a tax on the
sale of services. It is an indirect tax collected by the service
provider on behalf of the government. Though service tax is a
type of sales tax on services rendered, it is administered by
the Department of Excise and Customs working under
Department of Revenue, Ministry of Finance, Government of
India. The responsibility of administration and collection of
service tax has been vested with CBEC (Central Board of Excise
and Customs)

15. Trainings by Vidya Bhagwat
Accounting: Basic Concepts :
• Some of the basic accounting terms that you will learn include
revenues, expenses, assets, liabilities, income statement,
balance sheet, and statement of cash flows. You will become
familiar with accounting debits and credits as we show you
how to record transactions. You will also see why two basic
accounting principles, the revenue recognition principle and
the matching principle, assure that a company's income
statement reports a company's profitability.
Bookkeeping and Accounting Share Two Basic Goals :
• To help the owner keep track of your income and expenses.
• To make financial reports for understanding the results
of operations.

16. Trainings by Vidya Bhagwat
Capital Gains Tax - An Overview :

17. Trainings by Vidya Bhagwat
• To save long term capital gain the seller has to buy a house
property within two years of sale of capital asset or construct
a house within three years. If seller is not able to identify a
property he/she can open a capital gain accounting scheme’s
special account and park the money until he finds the
property (with limit of 3 years). Seller also can invest money in
specific bond up to limit of Rs 50 Lakhs to save LTCG tax.

18. Trainings by Vidya Bhagwat