As part of the AatmaNirbhar Bharat Package 3.0 as announced by Hon’ble Finance Minister on 12th November, 2020, certain income tax relief measures were brought in for real-estate developers and home buyers.
In order to boost demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, it has been decided to further increase the safe harbour from 10% to 20% under section 43CA of the Act for the period from 12th November, 2020 to 30th June, 2021 in respect of only primary sale of residential units of value up to Rs. 2 crore. Consequential relief by increasing the safe harbour from 10% to 20% shall also be allowed to buyers of these residential units under section 56(2) (x) of the Act for the said period. Therefore, for these transactions, circle rate shall be deemed as sale/purchase consideration only if the variation between the agreement value and the circle rate is more than 20%.
source: https://www.incometaxindia.gov.in/pages/press-releases.aspx
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Disclaimer
This is an informative article and should not be taken as a professional advice. We recommend seeking professional advice prior to initiating action on explicit issues.