Kolkata, Nov 12: The West Bengal real estate industry welcomed the Union government’s announcement of doubling the circle rate differential to 20 per cent and said it will help them immensely to liquidate unsold housing stocks of the builders.. The differential of circle rate and the actual price has been increased to 20 per cent from the earlier 10 per cent for the sale of residential units of value up to Rs 2 crore by the Union Finance minister in her stimulus announcements.
“This will help builders of this region to offload housing stock for builders desire to sell below the circle rate but couldn’t due to adverse tax implications,” real estate sector body Credai Benga president Nandu Belani told PTI. If the sale value of a property is lower than the circle rate which is fixed by respective state governments, then the difference is taxed as ‘other income’ for the buyer.
While the seller of the property will have to pay capital gains tax on the circle rate of the property. In simple terms now builders can sell up to 20 per cent below the circle rate without adverse tax implications.
As per ANAROCK Research, there are approximately 5.45 lakh unsold units across the top 7 cities priced up to Rs 1.5 crore while another 49,290 units priced between Rs 1.5 crore to Rs 2.5 crore. Credai was fighting for a high circle rate in West Bengal which was posing hindrance in the sale of housing stock for them.