FM Smt. Nirmala Sitharaman: In a significant demand booster for the residential real estate sector, the govt has decided to make amendments in the Income Tax Act to help home-buyers as well as developers
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Differential between circle rate and agreement value in real estate income tax is being increased from 10% to 20%. This is for the primary sale of residential units up to Rs. 2 Crore (from date of announcement of this scheme, till June 30 2021). The Income Tax relief provides incentive to middle class to buy homes.
6. Demand booster for Residential Real Estate Income Tax relief for Developers & Home Buyers
• Economic slowdown has led to decline in prices of residential unit
• Presently Section 43CA of IT Act restricts differential between circle rate & agreement value @ 10% - Prices may actually be lower than this.
• Decided to increase the differential from 10% to 20% (under section 43CA) for the period from the date of the announcement to 30th June 2021 for only primary sale of residential units of value up to Rs 2 crores.
• Consequential Relief up to 20% shall also be allowed to buyers of the these units under section 56(2)(x) of IT Act for the said period.
• The necessary amendment to IT Act would be proposed in due course.
• This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory.Tags : income tax