Govt announces income tax relief for houses costing up to Rs 2 cr

New Delhi: The government has announced tax relief for home buyers and real estate companies for houses costing up to Rs 2 crore in the form of income tax. Finance Minister Nirmala Sithraman today said that relaxations will be provided in the income tax regulations to permit sale of primary residential units priced up to Rs 2 crore below the circle rate. 

So far, only 10 percent difference between agreement value of the residential property and the circle rate was allowed. The measure is are aimed ta providing boost to the residential real estate sector which has been reeling under severe slowdown. The differential will now 20 percent till 30 June 2021. This is will be applicable only for sale of primary residential property.

"This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory," she said while detailing another stimulus package which forms part of Atmanirbhar Bharat 3.0.

The government will also infuse equity of Rs 6,000 crore in the debt platform of the National Infrastructure Investment Fund (NIIF). Even the performance security on project contracts in construction and infra sectors will now be only 3 percent.