Another Relief Package: Now, Income Tax relief for Developers & Home Buyers in Atmanirbhar Bharat Package 3.0


Another Relief Package: Now, Income Tax relief for Developers & Home Buyers in Atmanirbhar Bharat Package 3.0

For boosting Demand of Residential Real Estate Income Tax relief for Developers & Home Buyers, a new relief measures is announced by the Government. 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.

Government is making all attempts to revive the economy which has been severely affected by Covid-19. More particularly, the real estate sector.

The real estate sector have the capacity to generate the required flow and movement as various other industries are dependent on this industry for their survival like cement, steel, labour, etc.

There was a key announcements to promote the real estate sector in Atmanirbhar Bharat Pacakge-3.0 whereby Relief from Notional Taxation u/s 43CA & 50C is given to certain categories of taxpayers.
Tolerance limit for variation between actual sale consideration and stamp duty valuation has been enhanced. Present differential between circle rate and agreement value in real estate income tax under Section 43CA of Income Tax Act-1961 has been increased from 10% to 20%.
However, this has been made applicable for primary sale of residential units up to ₹ 2 Crore from date of announcement of this scheme, till June 30 2021.

The tolerance limit has been done not only for seller but also the buyers of these units under section 56(2)(x) of IT Act for the said period.

The exact fine print of the law is not yet released as the necessary amendment to IT Act would be proposed in due course. Certainly, this measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory. This will indeed provide some relief to middle class to buy homes.