Finance Ministry
Realtors planning to move Finance Ministry against Proposed Tax on Property Sales
12:55 PMRealtors likely to move FinMin against proposed tax on property sales
Real estate developers are likely to
move the finance ministry against a proposed tax on property sales, as
they feel that the prevailing economic slowdown is impacting the
sector’s growth. The government has proposed a new Section 43CA in the
I-T Act, in which the developers have to pay the tax on the basis of
assessed valuation of a property at the time of transfer, instead of
levying tax on the basis of sale price, fixed when the project was
initiated.
As per the new Section 43CA in the I-T
Act, if the consideration for the transfer of an asset (other than
capital asset), being land or building or both, is less than the stamp
duty value, the value so adopted or assessed or assessable shall be
deemed to be the full value of the consideration for the purposes of
computing income under the head profits and gains of business or
profession.
The real estate developers are of the
view that the proposed tax is presumptive and questioned the
constitutional validity. The government’s recent move may put buyers in a
spot and reduce property sale in a slowing economy, which may impact
the government's plan to revive the real estate sector that is linked to
a number of industries like steel and cement and create jobs for
thousands of construction workers.
Meanwhile,
housing prices in India have been escalating over the period of time.
Pursuant to which the government planned to raise additional resources
by way of this move. The new tax will come into effect from April 1,
2014.
Source : MoneyWorks4me.com