← LeadSparxGST and TDS on Real Estate Brokerage in India (2026 Guide + Invoice Format)
Last updated: 16 October 2026
LeadSparx is operated by RHASVA TECHNOLOGIES PRIVATE LIMITED (“we”, “us”), Maharashtra, India.
For real estate channel partners and brokers who earn commission from builders: how much GST to charge, when and how much TDS the builder deducts, how to raise a valid tax invoice, and a worked example.
The short answer
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GST on brokerage: 18% (SAC 997222), if you are GST-registered.
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GST registration is required once your aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in special category states).
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The builder deducts TDS under section 194H at 2% (from 1 October 2024; it was 5%) on your brokerage excluding GST, once payments to you cross ₹20,000 in the year.
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What you actually receive: brokerage + GST − TDS.
GST on brokerage: rate and SAC code
Brokerage earned by a channel partner or broker for selling a builder’s flats is a taxable service at 18%. On the invoice it is normally classified under heading 99722 (real estate services on a fee or commission basis); SAC 997222 covers sale of buildings on a fee/commission basis.
GST is charged on the brokerage amount only — not on the flat’s agreement value.
CGST + SGST or IGST? Place of supply is where the property is
For services of estate agents connected to an immovable property, the place of supply is the location of that property (section 12(3) of the IGST Act) — not where the builder is registered or headquartered.
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Property in the same state as your GST registration → CGST 9% + SGST 9%.
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Property in a different state → IGST 18%.
Example: a Pune broker selling flats in a Pune project of a Bengaluru-registered builder charges CGST + SGST, because the property is in Maharashtra.
When to raise the invoice
Under the GST rules, a tax invoice for a service must be issued within 30 days of supplying it. For brokerage that is usually when the deal is concluded under your commission terms (for example, on booking or agreement registration). If you receive payment before invoicing, GST becomes payable on that receipt.
What a valid brokerage tax invoice must contain
Rule 46 of the CGST Rules lists the mandatory fields. For a brokerage invoice to a builder that means:
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Your name, address and GSTIN.
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A consecutive serial number, unique for the financial year and at most 16 characters (for example INV/2026-27/0001).
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The builder’s name, billing address and GSTIN.
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SAC code (997222) and a description, e.g. “Brokerage — Skyline Towers, Unit B-1204”.
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Taxable value (the brokerage).
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Rate and amount of CGST and SGST, or IGST.
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Place of supply (state name) where it is an inter-state supply.
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Your signature or digital signature.
Once issued, do not edit an invoice. If an amount was wrong, issue a credit or debit note against it — or, if you must cancel it, issue a fresh invoice with the next number.
TDS under section 194H: what the builder deducts
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Rate: 2% of the brokerage (from 1 October 2024; previously 5%).
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Threshold: TDS applies once total commission paid to you in a financial year exceeds ₹20,000 (₹15,000 before 1 April 2025).
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Base: brokerage excluding GST, when GST is shown separately on your invoice (CBDT Circular No. 23/2017).
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No PAN with the builder: TDS can be 20% (section 206AA) — always share your PAN.
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The builder must deposit the TDS by the 7th of the next month and give you Form 16A every quarter.
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Check every deduction in your Form 26AS / AIS and claim it as credit in your income-tax return.
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If your tax liability is low, you can apply for a lower-deduction certificate under section 197.
Don’t confuse this with section 194-IA: that is the 1% TDS a buyer deducts when paying the builder for a property worth ₹50 lakh or more. It has nothing to do with your brokerage.
Worked example
A flat is booked at an agreement value of ₹60,00,000 and the builder pays you 3% brokerage. The property and your registration are both in Maharashtra.
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Brokerage (taxable value): 3% × ₹60,00,000 = ₹1,80,000
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CGST 9% = ₹16,200 and SGST 9% = ₹16,200 (total GST ₹32,400)
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Invoice total: ₹2,12,400
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TDS u/s 194H: 2% × ₹1,80,000 = ₹3,600 (deducted by the builder, not on GST)
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Amount credited to your bank: ₹2,12,400 − ₹3,600 = ₹2,08,800
You pay the ₹32,400 GST to the government in your GST return, and claim the ₹3,600 TDS against your income tax.
Mistakes that cost brokers money
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Charging GST without being registered (or not charging it after crossing ₹20 lakh).
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Letting the builder deduct TDS on the GST-inclusive amount.
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Charging IGST because the builder is in another state, when the property is in yours.
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Still assuming 5% TDS — it has been 2% since 1 October 2024.
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Invoice numbers that aren’t sequential per financial year, or editing an invoice after sending it.
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Never reconciling Form 26AS, so TDS the builder deducted (or failed to deposit) goes unnoticed.
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Losing track of part-payments, so the last tranche of commission is never chased.
Frequently asked questions
What is the GST rate on real estate brokerage?
18% on the brokerage/commission, charged by a GST-registered broker or channel partner: CGST 9% + SGST 9% when the property is in the same state as the broker, or IGST 18% when it is in another state.
What is the TDS rate on brokerage under section 194H?
2% from 1 October 2024 (it was 5% before). It applies once total commission paid to the broker in a financial year exceeds ₹20,000 (₹15,000 before 1 April 2025), and is deducted on the brokerage excluding GST when GST is shown separately on the invoice.
Is TDS deducted on the GST amount?
No. When GST is shown separately on the invoice, TDS is calculated on the brokerage value excluding GST (CBDT Circular No. 23/2017).
Is GST on brokerage paid under reverse charge?
No. Brokerage is under forward charge: the registered broker charges GST on the invoice and pays it to the government.
Does a broker need GST registration?
Registration is required once aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in special category states). An unregistered broker cannot charge GST, but the builder still deducts TDS once the 194H threshold is crossed.
Disclaimer
This guide explains the rules as they stood on the date above, for general information. Tax law changes; confirm your specific situation with your chartered accountant.
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