Ansal vs I-T dept: Realtors await verdict on taxing unsold ready-to-move inventory
Realty developers across the country are awaiting the outcome of a crucial case between Ansal HousingNSE 3.58 % & Construction and income tax department with regards to unsold inventory and its treatment for imposing tax.
While the Union Budget for 2017-18, the government had introduced a provision to tax notional income on unsold ready-to-move inventory, this case has been in the court even prior to that. The outcome, therefore, developers fear may result in huge tax liabilities and notices against them for ready inventory that they were left with during the slump 2012-13 onward.
It was proposed in the Budget that if any residential apartment is held as stock-in-trade and is not let during the whole or part of the year, deemed annual value would be nil for the period up to one year from the end of financial year in which certificate of completion of construction obtained from the competent authority.