Aatmanirbhar Bharat 3 Income Tax Relief for Developers and Home Buyers Latest News

Nirmala Sitharaman, the finance minister declared income tax relief for both the real estate players, home buyers, and developers, to boost the demand amidst the downfall of the economy. For primary residential real estate sales of up to ₹2 crores, the differential between circle rate and agreement value increased to 20% from 10% earlier. The offer will be applicable till 30 June 2021.

"The increase in the differential between circle rates and agreement value - from 10% to 20% (under Section 43CA) – is indeed a good move. This limited-period offer (up to 30 June 2021) will benefit both developers and homebuyers," said

Anuj Puri, chairman – ANAROCK Property Consultants, said,

"For home buyers, it is a clear added financial benefit to round off the existing offers and discounts. Additionally, the consequential relief up to 20% to buyers of these units under Section 56(2)(x) of the IT Act for the said period will boost demand, especially in the affordable and mid segments,".

For developers, this move will help clear unsold stock, he added.

As per ANAROCK research, there are approx 5.45 lakh unsold units across the top 7 cities priced up to ₹1.5 crores while another 49,290 units priced between ₹1.5 crore to ₹2.5 crore.

"The move is a win-win for both developers and homebuyers. It will help reduce the high inventory, reduce the cost of acquisition for homebuyers. Real estate prices in many pockets of India have remained subdued, declined in some cases, a higher difference will help address this issue," Krish Raveshia, CEO, Azlo Realty.

The Finance minister also announced a ₹18,000-crore additional outlay for the urban housing scheme to help complete real estate projects. " ₹18,000 crores would be provided over and above the Budget Estimates for 2020-21 for the Prime Minister Awas Yojana (Urban) through additional allocation and extra-budgetary resources," Nirmala Sitharman announced. This will over and above ₹8,000 crores already provided this year. The move will help start work on 12 lakh houses as well as complete 18 lakh houses.

"This will help bridge the housing gap in the country to a good extent and is simultaneously an excellent economic growth driver by creating more employment," said Puri.

"Five years after the implementation of this ambitious scheme, Pradhan Mantri Awas Yojana (Urban) has made steady progress across states. As of August 2020, a total of 1.06 crore homes had already been sanctioned in the country, of which 33% or approx. 35.18 lakh homes are completed while another 66.23 lakh units have been grounded for construction," he explained.

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