Realty proposes, Budget disposes
The real estate story in India continues to sway to the tunes of cautious economic scenario. Land owners and developers in recent times have been waiting for a fresh wave of resurgence. There were expectations during last couple of years were that real estate development should be granted infrastructure status and be offered the sops given to the infrastructure sector. However, the checkmate continues following past trend of tightening the real estate sector.
Some of the Budget pronouncements for the sector are:
Stamp duty valuation on transfer of land / building held as a business asset: Proposed amendment provides that minimum consideration for the transfer of immovable property held as a business asset should be at stamp duty valuation. The objective is to have a similar tax treatment on transfer of immovable property regardless of being a capital or a business asset. But, what is considered to be a ‘transfer of business asset’? The current definition of ‘transfer’ under the Act does not apply to assets other than capital asset. In case of business asset, transfer will be effected when the same is sold i.e. change of legal ownership. In many cases, when the land owner enters into an arrangement with developer, legal ownership may not change and hence the objective may be defeated.
In an event of a joint venture between a land owner and developer, transfer of immovable property (other than capital asset) could get triggered and land owner could get covered
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