IT Exemption For Delhi Legalised Unauthorised Colonies
In a big tax relief for Delhi’s unauthorised colonies that were regularised last year, the government has exempted owners from income tax even if they had purchased land or house at rates below the prevailing market price.
The government had last year legalised unauthorised colonies in the national capital, giving house owners legal property rights. Since these colonies were previously unauthorised, some may have purchased houses or lands at below the circle rate fixed by the government for registration of properties.
Now, the government has decided to give such owners exemption from payment of income tax. Without this exemption, such owners have become applicable on the difference between fair market value and actual purchase price.
The Central Board of Direct Taxes said the exemption would come into effect from April 1, 2020, and would be applicable for Assessment year 2020-21 and subsequent years. It said tax would not be levied on “any immovable property, being land or building or both, received by a resident of an unauthorised colony in the National Capital Territory of Delhi, where the Central Government regularised the transactions of such immovable property based on the latest Power of Attorney, Agreement to Sale, Will, possession letter and other documents in favour of such resident”. Presently tax is levied only on the differential of fair market value (FMV) and actual purchase price, if the house property is acquired at a price lower than the circle rate.