Atmanirbhar Bharat 3.0: FM Nirmala Sitharaman announces tax relief on sale of housing units

Finance Minister Nirmala Sitharaman

In a relief for developers and home buyers, Finance Minister Nirmala Sitharaman announced relaxations in income tax rules to allow the sale of primary residential units of up to Rs 2 crore value below the circle rate.

Till now, only 10 percent difference between the circle rate and the agreement value was allowed.

"The government has decided to increase the differential from 10 percent to 20 percent under Section 43(CA) of the IT Act till June 30, 2021," the FM said, adding that it would apply on the sale of residential units costing up to Rs 2 crore.

A consequential relief of up to 20 percent shall also apply to buyers of these units under Section 56(2)(x) of IT Act, she said.

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This measure will reduce the hardships faced by both home-buyers and developers in clearing unsold inventory, FM Sitharaman said.

She also said the Indian economy was witnessing a strong recovery after a long and strict lockdown. Addressing a press conference to announce more stimulus measures to boost growth, she said macro-economic indicators are pointing towards recovery.

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COVID-19 active cases have declined from over 10 lakh to 4.89 lakh with case fatality rate (CFR) at 1.47 percent, she said.

Giving out details of recovery, she said composite purchasing managers index (PMI) rose to 58.9 percent in October versus 54.6 percent in the previous month, registering a strongest increase in output in close to nine years.

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Energy consumption growth trended higher in October at 12 percent year-on-year, while Goods and Services Tax (GST) collections have grown 10 percent to over Rs 1.05 lakh crore.

The announcements come a day after the government approved a Production-Linked Incentive (PLI) scheme for 10 key sectors, including telecom, automobiles and pharmaceuticals, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period.