Government gives clarity on taxation of circle rate in real estate

New Delhi Feb 3: Union Finance Minister Arun Jaitley on Thursday has presented the budget and the government has also focused on Real estate sector and construction sector. Finance Minister has given some tax exemptions and also modified some provisions which were
causing hardships to people.

Jaitley has said that "Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller. Sometimes, this variation can occur in respect of different properties in the same area because of a variety of factors including shape of the plot and location. In order to minimize hardship in real estate transaction, I propose to provide that no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration."

The Finance minister had also proposed to amend stamp duty act and said that "We will take reform measures with respect to stamp duty regime on financial securities transactions in consultation with the States and make necessary amendments the Indian Stamp Act."