What is EDC-IDC External And Internal Development Charges in Real Estate

What is EDC-IDC External And Internal Development Charges in Real Estate,  Real Estate is a huge industry and there are lot many things to know about the external and internal development charges. This industry being is big is tough to understand for first time homebuyers. As they do not have core knowledge on investment and also unaware of the several terms.

EDC and IDC are two terms that are unfamiliar to buyers. These are not common terms and that is the reason that buyers are unaware about the same. In fact, there is no relevant education given to homebuyer relating to these terminology.

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When you as a buyer would like to invest in residential property there are lot many charges and expenses that needs to incur. And as a buyer you have to understand what actually it means.

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Extra Development Charges (EDC) In Real Estate

Apart from Basic Sale Price, there are lots of charges and expenses that occurs. Among those certain kinds of charges, EDC charges are crucial. This becomes important for every first time buyer to understand the charges and why the buyer has to necessarily pay them.

In Haryana, EDC and IDC are common because the government have opposed these kinds of charges on the properties which are under constructed after 2012. And this is applicable to every property for sale city even like Gurgaon and Faridabad.

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Don’t be a lost buyer rather choose to be a smart buyer. Be familiar with all the charges in your property in real estate and reason why they are charged. A smart buyer can get deductions so that he can ask from the builders for exemption or if excess is charged then he can ask for the refund.

Be knowledgeable about the everything that you should know. Even the first time buyers, you should be aware of the charges from all builders that government asks for is same and there is no change on the homes for sale.

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EDC- External Development Charges

EDC stands for External Development Charges, these charges are collected by the government through builders or developers so that they can carry on the external development in order to create a township or society.

All external work including electricity, water supply, roads, drains, sewage schools, hospitals, fire-stations, sub-stations, stadium/sports complex etc are counted in EDC.

Internal Development Charges (IDC) in Real Estate:

In real estate Investment these are the charges that are same as the EDC charges and are collected by the government.

All these charges are used by the government in building the infrastructure and in the improving of socio-economic sectors of the state that includes highways, transportation systems, water supply facilities, electricity facilities and much more.

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Difference Between EDC and IDC

IDC covers the cost of infrastructure developments like transit systems and highways in the city at the project location.

EDC is for essential facilities like drainage, electricity supply, water supply, landscaping, etc., done solely for the project.

Know the reality

These charges are not paid by any developer and hence are ultimately levied on the customer on per sq.ft basis. They come under the hidden charges which they actually pay to the builders.

Calculation of EDC

Every state government have their own way to collect these charges.

• Property in Gurgaon, these charges are collected per gross acre.

All builders choose to calculate EDC on basis of per square feet so that they can easily put these charges on the buyers accordingly.

EDC Calculation on Per Sq. Ft Basis

FAR- It is an abbreviation for Floor Area Ration of the area. It is the Ratio of total floor area of all buildings is to the area of the plot is referred as FAR.

For example:

Plot area = 1000 sq.ft

Total floor area = 3,000 sq. ft.

FAR = 3

Note: The residential plots in Gurgaon, FAR varies between 1 -1.65.

Taxes

There is no other service tax charged on EDC or IDC as itself is itself a government taxes and taxes on taxes are levied by the government. These charges do not fall under the service tax slab also. Moreover, a buyer can simply refuse or ask for refund in case the builder is asking for service tax on EDC or IDC. 

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Impact of EDC on property price

EDC is extra charge and can increase the price of the buying property up to 10% to 20%.

FAQs

What is EDC?

EDC is the fee that builders have to pay to the civic authority for development of basic facilities in and around housing projects. These include supply of water, electricity, sewerage system, waste management system, landscaping, roads, etc.

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What is IDC?

IDC is the fee builders have to pay to the civic authority to enjoy the advantages of having major infrastructure projects near their housing project. These may include highways, metro networks, bridges, etc.

Can I opt out of paying EDC?

These charges are mandatory for every buyer in a housing project.

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