Lawstreet Journal

Income Tax Exemption by Government for residents of Unsanctioned Colonies in Delhi

Lawstreet Journal 1 Jul 2020 7:19pm

Image courtesy: Lawstreet Journal Executive Income Tax Exemption by Government for residents of Unsanctioned Colonies in Delhi

A big question of the unsanctioned property has been resolved by the Government by exempting the House owners from paying any tax. The Government last year legalized unsanctioned colonies in Delhi giving legal rights to the House owners. The Government has exempted the house owners from the prescribed income tax even if the property was purchased at the rate below the existing market price. As these properties were unsanctioned it may have been purchased by the people at a low rate fixed by the Government for registration of properties. After this, the Government has decided to give owners exemption from income tax. Before this exemption, there was a difference between fair market value and the actual purchase price.

The Central Board of Direct Taxes (CBDT) through a notification stated that this exemption would come in force from 1st April 2020 and would be applicable for the Assessment year 2020-2021 and subsequent years. 

The notification stated that “any immovable property, being land or building or both, received by a resident of an unauthorized colony in the National Capital Territory of Delhi, where the Central Government regularised the transactions of such immovable property based on the latest Power of Attorney, Agreement to Sale, Will, Possession letter and other documents in favor of such resident.”

In the present situation, tax is levied on the difference between market price and purchase price, if the property has been purchased at a lower rate than the stated rate. Nangia Andersen LLP, Partner Suraj Nangia stated that this is a… Continue Reading...

Tagged: Income Tax  
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