New Delhi, Jan. Jan 18 (IANS) The real estate sector may be in for further bonanza with the government looking to extend tax free status of income accruing from unsold residential units by another year.
Sources said that a proposal is being examined by the Centre to defer the implementation of provisions relating to the taxation of house property income that seeks to tax unsold units held as stock-in-trade by the builders of residential units for over two years.
The proposal, which may form part of Budget 2021 proposals, will extend taxability of unsold units by another year, providing relief to the real state sector that has piled up inventory of residential units due to the Covid-19 impact and now faces hardships because of the tax trigger on notional values.
“Provisions relating to the taxation of house property income seeks to tax unsold units held as stock-in-trade by builders of residential units for over two years. While this provision was introduced as a relief measure to the industry earlier, with initially a relaxation of up to one year, which was later extended to two years, this may not be sufficient under the current circumstances,” said a person from among the top four global consultancy firms.
“Extension will provide relief to the sector and help in clearing up the inventory as demand for residential units pick up,” he added.
The government has extended reliefs to the real estate sector through the announcements made as part of the ‘Aatmanirbhar Bharat’ package last year. But as the economy now picks up momentum after severe beating it got from the pandemic last year, the government is looking at various measures that address various sectoral concerns so that both supply and demand conditions get a leg up.