Real estate companies across the country have blamed the Income Tax law for not reducing the price of the flat. Recently, Commerce Minister Piyush Goyal had told the realty companies to reduce the price for the sale of the flats that have been built. In response to this, companies have said that they are unable to reduce the price of the flat due to the existing laws. The reason for this is that according to the income tax law, companies cannot sell flats at a price below the circle rate. The largest institutions in the realty sector, CREDAI and NAREDCO, have said that if the price of the flat is reduced by more than 10 percent compared to the circle rate, then the government is levied additional tax on it.
For your information, tell us tell you that plot, house, apartment or commercial property is sold on the basis of circle rate. The state governments decide the circle rates and there is no provision for the sale of such properties at a lower rate. On the same, reacting to the advice of Piyush Goyal, President of NAREDCO Niranjan Hiranandani said that the reduction of the price of flats by more than 10 percent against the circle rate is neither in the interest of the realty company nor the customers. The reason for this is that deductions in excess of that limit impose additional tax on both the buyer and the seller. This is not a solution to the problem.
In his statement, CREDAI chairman Zakshya Shah said that the realty sector is already troubled by the financial crisis of GST, RERA, demonetisation and NBFCs before the Corona crisis. He said that after the lockdown, there has been a lot of increase in raw material and labor costs. In a virtual meeting with realty companies on Wednesday this week, Goyal is heard saying that the government is trying to give some relief to realty companies. But the builders will have to try to sell their finished flats.
Also Read:
MSMEs getting new order, sector faces shortage of staff
Jio Platforms got big success, another company invested
Record increase in foreign exchange reserves, Know how
SBI: 22 percent customers took advantage of Moratorium Scheme
