To boost the demand amid the current situation, recently the Finance Minister announced income-tax relief measures for the home-buyers and the real estate developers. The Finance Ministry has increased the threshold limit for the difference between the transaction value and the circle rate / jantri rate to 20% from the current 10%.
As per the existing law, where any person receives consideration for transfer of an immovable property held as stock in trade and such consideration is less than the circle rate / jantri rate, for computing the business income, the circle rate / jantri rate is deemed to be the consideration. However, in case the difference is less than 10%, the aforesaid deemed consideration provision are not applicable.
Similarly, where any buyer received any immovable property for a consideration which is less than the circle rate / jantri rate, such difference is considered as income for the buyer. However, in case the difference is less than 10%, the aforesaid provision are not applicable.
In order to boost the demand, allow the developers to sell their unsold inventory and to reduce hardships faced by buyers, the tolerance limit of 10% is proposed to be increased to 20%.
Relied is granted only for the transactions satisfying the following conditions:
Residential units up to value of INR 2 Cr
Primary sale by developer to buyer
Sale from 12 November 2020 to 30 June 2021
It is pertinent to note that stamp duty shall be paid at circle rate / jantri rate
only.
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