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Construction and Real Estate Accounting Services in India

Reviewed by CA and CS Team, Patron Accounting LLP ICAI & ICSI Registered| 15+ Years Experience| Last Updated: 15 January 2024 Verify Credentials →

RERA Compliance: Project accounting with 70% escrow fund management under Section 4(2)(l)(D), RERA Act, 2016

GST Compliance: Correct GST rates - 1% (affordable), 5% (residential), 12% (commercial) per CGST Act, 2017

Revenue Recognition: Ind AS 115 advisory - percentage completion method (PCM) and project completion method

JDA and TDR Accounting: Joint Development Agreement, TDR, and land lease accounting with GST at 18% on development rights

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Patron Accounting has been managing our RERA compliance and GST filings for 3 years now. Their understanding of real estate accounting is exceptional - from escrow fund monitoring to Ind AS 115 revenue recognition. Highly recommended for developers.
RK
Rajesh Kumar
MD, RK Developers Pvt Ltd
★★★★★
3 months ago
As an EPC contractor, our GST compliance was a nightmare with different rates for government and private projects. Patron's team sorted out our RCM issues, vendor compliance monitoring, and now we file returns on time every month. Great service.
SP
Sunil Patil
Director, Patil Infrastructure
★★★★★
1 month ago
We had confusion about the percentage completion method vs project completion under Ind AS 115. The Patron team reviewed all our contracts and set up the correct revenue recognition framework. Their quarterly RERA report filing is also seamless.
AM
Anita Mehta
CFO, Skyline Real Estate Group
★★★★★
2 months ago
Managing TDS under Section 194-IA for multiple property transactions was complex. Patron Accounting set up an automated system for Form 26QB filing and ensured we never missed the 30-day deadline. Professional and reliable.
VS
Vikram Singh
Partner, Singh and Associates Builders
★★★★★
4 months ago
Our JDA accounting was complex with GST at 18% on TDR and multiple land parcels. Patron's CA team handled the entire accounting, RCM compliance, and capital gains computation flawlessly. They understand the construction industry deeply.
PJ
Priya Joshi
Landowner, Pune
★★★★★
5 months ago

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Construction and Real Estate Accounting Services - Overview

📌 TL;DR - Construction and Real Estate Accounting Services at a Glance

Real estate and construction firms in India must navigate RERA escrow rules, multi-rate GST, Ind AS 115 revenue recognition, TDS Section 194-IA, and project-wise cost tracking. Patron Accounting provides one-stop CA and CS support starting at Rs 5,000 per month.

Construction and real estate accounting in India is significantly more complex than general business accounting. Long-duration projects spanning 2-5 years, milestone-based revenue recognition, RERA's mandatory 70% fund ringfencing, and multi-rate GST across residential and commercial segments demand specialist expertise.

India's construction and real estate sector - contributing approximately 7-8% to GDP - demands specialised accounting, RERA compliance, and multi-layered GST management. Patron Accounting LLP provides end-to-end financial and compliance services for developers, contractors, and property managers across India.

Content is reviewed quarterly for accuracy.

What is Construction and Real Estate Accounting?

Construction and real estate accounting is specialised financial management for developers, contractors, and property firms - covering project-wise cost tracking, RERA compliance, GST filings, revenue recognition under Ind AS 115, and statutory audits.

Unlike general accounting, real estate accounting requires handling long-duration projects (2-5 years), milestone-based revenue recognition under Ind AS 115, RERA's mandatory 70% fund ringfencing under Section 4(2)(l)(D), and multi-rate GST across residential (1%, 5%) and commercial (12%) segments under the CGST Act, 2017.

Patron Accounting provides end-to-end CA and CS services specifically designed for the construction and real estate sector, serving 400+ clients across Mumbai, Pune, Delhi NCR, and Bengaluru.

Key Terms for Construction and Real Estate Accounting:

  • RERA: Real Estate (Regulation and Development) Act, 2016 - regulates project registration, buyer fund protection, and dispute resolution
  • Ind AS 115: Indian Accounting Standard for revenue from contracts - replaced Ind AS 11 and Ind AS 18 from 1 April 2018
  • JDA (Joint Development Agreement): Contract between landowner and developer; GST at 18% on TDR transfer
  • WIP (Work in Progress): Construction costs incurred on an ongoing project before revenue is recognised
  • TDR (Transfer of Development Rights): Rights transferred under JDA; developer pays GST at 18% on TDR value
  • Escrow Account (RERA): Separate bank account where 70% of buyer collections must be deposited
RERA Construction and Real Estate Accounting
Industry-Specific Real Estate Accounting Expertise

Who Needs Construction and Real Estate Accounting Services in India

The following entities require specialised accounting and compliance support:

  • Real estate developers (residential and commercial) with projects exceeding 500 sq.m. or 8 apartments under Section 3, RERA Act, 2016
  • Infrastructure and EPC contractors with long-term fixed-price contracts governed by Ind AS 115
  • Construction firms providing works contract services attracting GST at 12% (government) or 18% (non-government)
  • Property management companies collecting maintenance charges above Rs 7,500 per month per member (attracting 18% GST)
  • Real estate agents registered under Section 9, RERA Act, handling RERA-registered project transactions
  • Landowners entering JDAs or TDR arrangements with GST implications at 18% under Reverse Charge Mechanism
  • Real Estate Investment Trusts (REITs) requiring SEBI compliance and distribution accounting
Project TypeRERA Applicable?GST RateKey Compliance
Affordable Residential (RREP)Yes (if > 500 sq.m. or > 8 units)1% (no ITC)GSTR-1, GSTR-3B, GSTR-9
Other ResidentialYes5% (no ITC)GSTR filings + RERA quarterly reports
Commercial (in RREP)Yes5% (no ITC)GSTR + RERA compliance
Standalone CommercialYes (if applicable)12% (with ITC)Full GST return cycle
Works Contract - GovtNot typically12% (with ITC)GST + TDS Section 194C
Works Contract - PrivateNot typically18% (with ITC)GST compliance + invoicing
Ready-to-Move PropertyN/A (post-completion)ExemptStamp duty + Registration

6 Core Construction and Real Estate Accounting Services

ServiceWhat We Do
RERA Compliance and Project AccountingRERA registration advisory, 70% escrow account setup and monitoring, quarterly progress report filing, and project-wise fund reconciliation under Section 4, RERA Act, 2016
GST Registration, Filing and AuditGST registration, monthly GSTR-1 and GSTR-3B filing, annual GSTR-9 and GSTR-9C, RCM compliance for unregistered vendor procurement, and ITC reconciliation for commercial projects
Revenue Recognition Advisory (Ind AS 115)Analysis of performance obligation - 'over time' (PCM) or 'at a point in time' (project completion), contract review, and milestone-based revenue scheduling
Project Cost Accounting and WIP ManagementJob costing by project, WIP tracking, budget vs. actual variance analysis, retention accounting, and sub-contractor payment management
Income Tax ComplianceTDS Section 194-IA compliance for property transactions above Rs 50 lakh, advance tax planning, Section 43CA (deemed consideration), Section 50C advisory, and Section 80-IBA deduction
Audit and Financial ReportingStatutory audit under Companies Act 2013, tax audit under Section 44AB, project-specific profitability reports, and lender-required financial statements
Our Process

How We Work - 7-Step Process for Real Estate Accounting

From initial project classification through to audit and tax filing, our structured 7-step process ensures complete RERA, GST, and income tax compliance for your real estate business.

Step 1

Initial Assessment and Project Classification

We classify the project type (residential/commercial/JDA/works contract), confirm RERA applicability under Section 3 of the RERA Act, 2016 (> 500 sq.m. or > 8 apartments), and identify GST rate applicability under CGST Act, 2017.

Project type classification RERA and GST rate mapping
Project Review 01
Step 2

Entity Registration and Structuring

Assist with RERA project registration on the state RERA portal (30-60 day processing time), GST registration under CGST Act if not already registered, and advisory on SPV (Special Purpose Vehicle) formation for project isolation.

RERA portal registration GST and SPV setup
Registration Done 02
Step 3

Chart of Accounts Setup

Configure project-wise chart of accounts with separate cost centres for each tower/phase, RERA escrow account integration, and WIP tracking sub-ledgers per Ind AS 115 requirements.

Project-wise cost centres Escrow integration
Accounts Ready 03
Step 4

Revenue Recognition Framework

Determine PCM vs. project completion method eligibility per Ind AS 115 Paragraphs 35-36. For PCM: establish cost-based input method measurement; for project completion: set revenue booking trigger at possession/OC date.

Ind AS 115 analysis Revenue methodology set
Revenue Framework 04
Step 5

GST Compliance Cycle

Monthly GSTR-1 (outward supplies), GSTR-3B (summary), RCM self-invoice for unregistered vendor purchases, quarterly GSTR-2B reconciliation, and annual GSTR-9/9C. For affordable housing (1% GST): confirm 80%+ inputs from registered suppliers.

Monthly GSTR filing RCM compliance
GST Filed 05
Step 6

RERA Quarterly Filings

Upload quarterly progress reports covering construction milestones, fund utilisation from escrow account, and updated completion timelines. Ensure 70% of collections remain in the RERA designated bank account.

Quarterly RERA reports Escrow fund certification
RERA Compliant 06
Step 7

Closing and Audit

Prepare project-close financial statements, compute capital gains for landowner in JDA arrangements, file Section 194-IA TDS returns, and conduct statutory or tax audit as applicable under Companies Act 2013 and Section 44AB.

Statutory audit completed TDS returns filed
Audit Complete 07

Documents and Information Required for Real Estate Accounting

For RERA Registration

  • Land title deed / ownership documents
  • Sanctioned building plan from local authority
  • Project layout and carpet area statements
  • CA-certified project cost estimation
  • Commencement Certificate / Building permit
  • Details of past completed projects (if any)
  • PAN and Aadhaar of promoter(s)
  • Entity registration documents (Company/LLP/Partnership)

For GST Compliance

  • GST registration certificate (if existing)
  • Sales agreements / allotment letters with buyer consideration breakdown
  • Vendor invoices for materials and services
  • Land cost documentation (for valuation and deduction purposes)
  • Bank statements for RERA escrow account
  • ITC register for commercial projects

For Income Tax and Audit

  • Books of accounts (Tally/ERP data)
  • TDS challan for Section 194-IA payments by buyers
  • Joint Development Agreement or TDR agreement
  • Stamp duty valuation report from registered valuer
  • Previous year audited financials

4 Common Challenges in Real Estate Accounting and How We Solve Them

ChallengeImpactHow Patron Accounting Solves It
Choosing PCM vs. Project Completion Method under Ind AS 115Using incorrect method leads to restatement risk and regulatory scrutinyWe review each contract against Ind AS 115 Paragraphs 35-36 criteria - checking alternative use and enforceable right to payment per Specific Relief (Amendment) Act, 2018
GST RCM on Unregistered Vendor PurchasesUnexpected GST liability if more than 20% inputs are from unregistered vendors (cement at 28% under RCM)Vendor compliance monitoring and RCM self-invoice implementation to ensure timely liability discharge and avoid Section 73/74 notices
RERA Escrow Fund Diversion RiskPenalties under Section 61, RERA Act (up to 5% of project cost for contravention)Separate fund flow monitoring and quarterly certification of fund utilisation for RERA filings
TDS Non-Compliance on Property TransactionsDemand notices and short-deduction penalties under Section 201, Income Tax ActEnd-to-end buyer and seller counselling for Form 26QB filing within 30 days of TDS deduction under Section 194-IA

Construction and Real Estate Accounting - Fees and Pricing 2026

Fee ComponentAmount
Patron Accounting Professional FeesStarting from INR 3,499 (Exl GST and Govt. Charges)
RERA Compliance PackageRs 8,000/month (includes quarterly filing + escrow monitoring)
GST Filing (Residential Developer)Rs 5,000/month (GSTR-1 + GSTR-3B + advisory)
GST + Income Tax ComplianceRs 12,000/month (full indirect + direct tax compliance)
Ind AS 115 Revenue Recognition AdvisoryRs 15,000 (one-time per project - contract analysis + framework setup)
Project Cost Accounting (WIP/Job Costing)Rs 10,000/month (per project - bookkeeping + reports)
Annual Statutory AuditRs 25,000 onwards (based on project size and complexity)
Full Real Estate Accounting PackageRs 20,000/month (RERA + GST + Income Tax + Audit support)

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free Construction and Real Estate Accounting consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Construction and Real Estate Accounting - Key Timelines

StageEstimated Timeline
RERA Project Registration (state portal)30-60 days (statutory processing time)
GST Registration for new developer7-10 working days
Ind AS 115 Contract Analysis Report5-7 working days
Monthly GST Return Filing (GSTR-1 + 3B)By 11th and 20th of following month
RERA Quarterly Progress ReportWithin 30 days of each quarter end
Annual GSTR-9/9C FilingBy 31 December of following financial year
Statutory Audit Completion60-90 days post financial year
Tax Audit (Form 3CD)By 30 September of following financial year

Important: RERA quarterly reports, GSTR-1, and GSTR-3B have strict due dates. Late filing attracts penalties - Rs 50/day for GSTR-1 and 18% per annum interest on late GST payment. Patron Accounting manages all filing calendars and sends advance reminders.

Key Benefits

Why Choose Professional Accounting for Your Real Estate Business

Avoid RERA Penalties

Non-registration can attract penalty of up to 10% of project cost under Section 59, RERA Act, 2016; imprisonment up to 3 years for repeat violations.

Prevent GST Demand Notices

Incorrect GST rate classification results in differential tax + interest under Section 50, CGST Act. We ensure correct 1%/5%/12% rate application.

Optimise Tax Position

Correct PCM application under Ind AS 115 reduces tax liability on deferred revenue. Section 80-IBA deduction planning for affordable housing projects.

Secure Construction Finance

Banks and HFCs require RERA-compliant project financials and WIP-certified cost statements. We prepare lender-ready financial reporting.

Protect Buyers

Transparent fund management and RERA disclosures avoid consumer forum complaints and build buyer trust.

Reduce TDS Non-Compliance

End-to-end Section 194-IA management for buyer and seller transactions exceeding Rs 50 lakh, with Form 26QB filing.

Why Patron Accounting for Real Estate

Trusted by 400+ real estate developers, contractors, and property managers across India | ICAI-registered Chartered Accountants | 4 offices: Mumbai, Pune, Delhi NCR, and Bengaluru | Average 4.8/5 rating from clients

Our clients include residential developers managing 50-500 unit projects, EPC contractors with contract values from Rs 2 crore to Rs 200 crore, property management firms overseeing 1,000+ units, and landowners entering Joint Development Agreements.

DIY vs. Professional Real Estate Accounting - 7-Point Comparison

AspectPatron AccountingDIY / In-House
RERA ComplianceManaged filing + escrow certificationRisk of missed quarterly filings and penalty
GST Rate ClassificationExpert classification + ITC advisoryRisk of wrong rate (1%/5%/12% errors)
Ind AS 115 ApplicationContract-by-contract advisoryComplex PCM vs. completion method analysis missed
TDS Section 194-IAEnd-to-end TDS + Form 26QB complianceOften overlooked for buyer transactions
RERA Penalty RiskZero-penalty compliance track recordUp to 10% of project cost
CostTransparent monthly retainer from Rs 5,000Hidden rework + penalty costs
Audit ReadinessProactive + lender-ready reportingReactive and fragmented

Related Services for Construction and Real Estate Businesses

Patron Accounting also provides the following complementary services for construction and real estate businesses:

Legal and Regulatory Framework for Real Estate Accounting in India

Law / StandardKey ProvisionImpact on Accounting
RERA Act, 2016 - Section 3Registration mandatory for projects > 500 sq.m. or > 8 apartmentsProject setup and registration compliance
RERA Act, 2016 - Section 4(2)(l)(D)70% of buyer collections must be deposited in dedicated escrow accountFund ringfencing and quarterly certification
RERA Act, 2016 - Section 59/61Non-registration penalty up to 10% of project cost; fund diversion penalty up to 5%Penalty avoidance through compliance
CGST Act, 2017Works contract and real estate classified as services; rates 1%, 5%, 12%, 18%GST rate determination per project type
GST Council Notification - April 2019New rates: 1% affordable, 5% residential, 5% commercial in RREP, all without ITCITC eligibility and rate classification
Ind AS 115 (MCA, March 2018)Revenue from Contracts with Customers - 5-step model; PCM if over-time criteria met under Para 35Revenue recognition methodology
Section 194-IA, Income Tax Act1% TDS on immovable property consideration >= Rs 50 lakh by buyerTDS compliance for property transactions
Section 43CA, Income Tax ActDeemed consideration at stamp duty value if transfer price is lowerTax planning for developer transfers
Section 80-IBA, Income Tax Act100% profit deduction for eligible affordable housing projects meeting conditionsTax optimisation for affordable housing

Frequently Asked Questions - Construction and Real Estate Accounting

Get answers to the most common questions about RERA compliance, GST for real estate, Ind AS 115, TDS on property, and project accounting in India.

Quick Answers

What is real estate accounting?
Real estate accounting is project-based financial management for property developers and contractors, covering RERA compliance, GST under CGST Act 2017, revenue recognition under Ind AS 115, WIP tracking, and statutory audits.

Is GST applicable on land purchase in India?
No. The sale of land is not subject to GST under the CGST Act, 2017. However, development of land (works contract services) attracts GST. For under-construction apartments, GST is calculated on 67% of the agreement value (treating 33% as land value, which is exempt).

What is works contract in GST?
Works contract is defined under Section 2(119) of the CGST Act, 2017 as a contract involving supply of services (including construction, installation, or renovation) where transfer of immovable property is also involved. GST is 12% for government projects and 18% for non-government projects (both with ITC).

Compliance Deadlines - Do Not Miss These

DeadlineRequirementPenalty for Default
Before first sale / advertisementRERA project registration (Section 3, RERA Act)Up to 10% of project cost (Section 59)
11th of each monthGSTR-1 filing (outward supplies > Rs 1.5 crore turnover)Rs 50/day (CGST + SGST) late fee
20th of each monthGSTR-3B filing (GST payment)Interest at 18% per annum on late payment
31 DecemberGSTR-9 and GSTR-9C annual return (if applicable)Rs 200/day (CGST + SGST) late fee
Within 30 days of quarter endRERA quarterly progress reportPenalty under Section 61, RERA Act
30 SeptemberTax audit (Form 3CD) under Section 44AB0.5% of turnover, max Rs 1.5 lakh
Within 30 days of deductionTDS deposit and Form 26QB filing (Section 194-IA)Interest + penalty under Section 201

Do not risk penalties - Call +91 945 945 6700 or WhatsApp us for a free compliance calendar review.

Start Your Real Estate Compliance Today

Construction and real estate accounting in India sits at the intersection of RERA compliance, multi-rate GST, Ind AS 115 revenue recognition, and complex income tax provisions. From RERA project registration and 70% escrow fund management to monthly GST filings, quarterly progress reports, and annual statutory audits, the compliance workload is significant and multi-dimensional.

Patron Accounting LLP provides integrated CA and CS services specifically designed for real estate developers, construction contractors, property managers, and landowners. Our sector-specialist team handles the complete compliance lifecycle - from project inception through to project handover, audit, and tax filing - allowing you to focus on construction and sales.

400+ real estate clients served | 12+ years sector experience | 4 offices across India | Average 4.8/5 client rating

Book a Free Consultation - No Obligation.

Construction and Real Estate Accounting Services Across India

Patron Accounting provides real estate accounting and RERA compliance services across major Indian cities.

Content Created: 15 January 2024  |  Last Updated: 15 January 2024  |  Next Review: March 2027  |  Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed annually or upon regulatory changes to RERA Act 2016, CGST Act 2017, Ind AS 115, and Income Tax Act 1961. Next scheduled review: March 2027.

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