Real estate developers eye tax relief on deemed rental income
NEW DELHI: The developers’ concerns over the tax provision wherein they are required to pay tax on deemed rental income on unsold apartments may be addressed in the coming Budget.
Finance minister Arun Jaitley, at a conclave conducted by Confederation of Real Estate Developers’ Associations of India (CREDAI), has assured the developers and builders that the government will look into the tax issues.
The deemed rental income is the notional income assigned to an appartment at the prevailing market rate even though it’s not given on rent.
Getamber Anand, CREDAI president and CMD of ATS Infrastructure, said, “The taxation of deemed rental income is affecting the builders in a big way.
Particularly in slowdown, developers are normally left with unsold inventory even after completing the project. They are thus required to hold, though they do not want to, till the time they eventually find buyers for the same.”
Vikas Vasal, partner at global consultancy firm KPMG, said that the intent of these provisions is to ensure that unutilised housing capacity in the country is put to effective use to meet the housing demand.
Therefore, the tax law provides that only one house property owned by an individual will be treated as self-occupied and hence will not be taxed. Any additional house property owned by an individual which is not actually let out is treated as deemed to be let out and taxed accordingly .
In fact, the provision has become applicable on developers following a Delhi High Court judgment in the case of CIT Vs Ansal Housing Finance and Leasing Co, which upheld the view that the annual letting value (ALV) in respect of unsold flats held by the real estate developers is liable to tax on notional basis under the head -Income from House Property , though no rent is actually earned.
Read full article: The Economic Times
The investigation into illegal access to mobile phone call details of BJP leader Arun Jaitley has opened a Pandora’s box. Read more
NEW DELHI: In the dock once in 2006 for illegally tapping former SP leader Amar Singh's phone, private detective Anurag Read more
Finance Minister Arun Jaitley spoke out against the fact that the Supreme Court is deliberating on the issue of Aadhaar Read more
New Delhi: Attributing the NDA's defeat in Bihar assembly elections to 'huge index of opposition unity', Finance Minister Arun Jaitley Read more
