The Government has finally declared the budget 2018 and Real estate is hoping for some positive changes this time. Sometimes a property is sold at less than its circle rates as real estate prices are dropping in many cities.
Budget 2018 has finally put some light on the taxation problem which occurs due to this gap, now the suggested tax relief set up to 5% for capital gains tax, which is a relief for buyers and sellers.
Circle rate is the minimum value at which the sale or transfer of a plot, built-up house, apartment or a commercial property can occur. To prevent the tax evasion the circle rates were initiated. Circle rates are now higher than market rates in many cities as the real estate prices are down. The registrar office charges stamp duty at the circle rate when a person sells his property at lower rates than the circle rate. The income tax department deems the difference as unaccounted money and charges taxes from both the buyer and the seller on the amount, which is the difference between the circle rate and sale value.
However, now both the seller and buyer won’t have to pay the tax on the difference amount if the circle rate value does not exceed 5%, as Arun Jaitley proposed.
Some developers are not satisfied with the idea and claims that the stamp duty should be charged on the real transaction value instead of circle rate value.
Real Estate Consultants: Madhyam.com