Income tax relief for real-estate developers, home buyers announced under Aatmanirbhar Bharat Package 3.0

New Delhi [India], November 13 (ANI): In order to boost demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, the government has decided to allow them to sell their housing units at 20 per cent lower than the circle rate by increasing the permissible differential.
The benefit will be available only on primary sale of residential units with value up to Rs 2 crore until June 30, 2021.
As part of the Aatmanirbhar Bharat Package 3.0 as announced by Finance Minister Nirmala Sitharaman on Thursday, certain income tax relief measures were brought in for real-estate developers and home buyers.
"To enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, it has been decided to further increase the safe harbour from 10 per cent to 20 per cent under section 43CA of the Act for the period from November 12 to June 30 in respect of only primary sale of residential units of value up to Rs 2 crore. Consequential relief by increasing the safe harbour from 10 per cent to 20 per cent shall also be allowed to buyers of these residential units under section 56(2)(x) of the Act for the said period," a Finance Ministry release said.
It said that for these transactions, circle rate shall be deemed as sale/purchase consideration only if the variation between the agreement value and the circle rate is more than 20 per cent.
The legislative amendments will be proposed in due course, the release said.
It said currently, the circle rate is deemed to be the sale/purchase consideration for real estate developers and buyers only where the variation between the agreement value and the circle rate is more than 10 per cent. (ANI)