Aatmanirbhar Bharat 3 Income Tax Relief for Developers and Home Buyers
Buying a house is now easier with a 20% lower rate than the circle rate, without having to pay penal income tax. The developer is also not liable to pay tax on such a deal.
What’s a Circle rate?
Circle rate / ready reckoner rate implies a standard rate fixed by the district administrative authority for a particular land across the city.
How can you go about it?
This Rule applies to residential units up to Rs 2 crore and will remain valid till June 30, 2021, according to a statement issued by the finance ministry.
This tax relief will result in increased demand and will help clear unsold inventory of residential units valued at up to Rs 2 crore.
Prices of many residential units have gone below circle rates due to the economic crisis brought about by coronavirus and as a result, market rates are much below circle rates for these places. Before this new rule, if a buyer sold property at a rate lower than the circle rate, the amount of difference between the circle rate and the agreed rate was taxable for both buyer and seller.
In the current scenario, the law bounds differential circle rate and agreement at 10%.
The government allowed developers to sell at rates up to 10% lower than the circle rate without attracting additional tax.
The Country has redeemed from the dreadful contraction of 24% in the April-June quarter but will end up diminishing by nearly 10% in the fiscal year to March 2021. This move is seen as the government’s attempt to bring the economy back on track.
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