The exemption announced by Finance Minister Nirmala Sitharaman under Section-43CA of I-T Act, increasing the differential between circle rates and the agreement value of a residential property of up to ₹2 crore from 10% to 20%, would benefit developers and home-buyers alike, analysts said. The exemption will help developers honour existing offers and discounts to exhaust unsold inventory without paying penalty. Earlier, they were not able to sell below the set limit due to fear of bearing an additional burden. The consequential relief up to 20% to buyers of these units under Section 56(2)(x) of the I-T Act for the period up to June 2021 will ‘definitely’ boost demand, especially in affordable and mid segments, analysts said.“As per Anarock Research, there are approximately 5.45 lakh unsold units across the top 7 cities priced up to ₹1.5 crore while another 49,290 units priced between ₹1.5 crore and ₹2.5 crore,” said Anuj Puri, chairman, Anarock Property Consultants. “This [the tax liability] had been a major stumbling block for price rationalisation,” Niranjan Hiranandani, president (National) NAREDCO and Assocham said. However, he said that the cap of ₹2 crore will not benefit most projects in the metro cities. “This comes as a significant benefit for both buyers and sellers as it will reduce and rationalise tax outgo to a great extent,” Ramesh Nair, CEO and country head, JLL India, said. “The move to hike the differential to 20% will help developers to offload inventory and homebuyers to proactively buy properties without any tax liability,” Kamal Khetan, CMD, Sunteck Realty Ltd., said.
A letter from the Editor
Dear subscriber,Thank you!Your support for our journalism is invaluable. It’s a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.Suresh Nambath