These relatively new services will also be brought under the tax net apart from the usual services provided by real estate agents and consultants such as sale, purchase and leasing of land. This clarification was among the others issued by the ministry pertaining to a recent announcement of levy of service tax on 12 categories.

Colliers Jardine CEO Akshaya Kumar says, ``The 5 per cent service tax is certainly not a positive step for anyone connected to the real estate market, particularly so when the markets are down. The service tax is certainly going to affect the number of projects that our clients would like to undertake. This is one tax which would be passed on directly to our clients.''

RealtyExperts said that many of the smaller consultants are going to overstep the tax by making payments in cheques. There would be many service providers who are going to think of ingenious ways to avoid this tax.

The real estate agents association of India in July this year submitted a memorandum to the ministry to exempt the real estate sector from an additional tax burden as the markets are down and sales are slack, particularly in metros like Mumbai.

Goldstar Properties' M Balachandran says, ``This is inevitable for the service industry. The forecast is that eventually the service tax earned would be equivalent to the excise tax.''

But, many developers are taking relief in the fact that the government had announced a number of tax holidays for "approved" housing projects with 100 per cent deduction from profits for the first five years, and 30 per cent deduction for the subsequent five years.

Several consultants are relieved that the government's plan for re-introduction of Section 80GG for rentdeduction will be of benefit in at least small measure. This will have a minimum limit of Rs 2,500 per month and a maximum limit of Rs 30,000 a year--once again a tax gain of Rs 9,000 per year.

According to experts the most pressing demand of the property market was to get industry status for the housing sector. Instead, the government has put an additional tax on the sector.