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TMI BlogMEASURES FOR PROMOTING AFFORDABLE HOUSING AND REAL ESTATE SECTOR - DIRECT TAXESX X X X Extracts X X X X X X X X Extracts X X X X ..... sector and to make it more attractive for investment, it is proposed to amend section 2 (42A) of the Act so as to reduce the period of holding from the existing 36 months to 24 months in case of immovable property, being land or building or both, to qualify as long term capital asset. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent years. [Clause 3] Rationalisation of Provisions of Section 80-IBA to promote Affordable Housing The existing provisions of section 80-IBA provides for 100% deduction in respect of the profits and gains derived from developing and building certain housing projects subject to specified conditions. The conditions specified, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land is exempt from income tax. The Land Pooling Scheme is an alternative form of arrangement made by the Government of Andhra Pradesh for formation of new capital city of Amaravati to avoid land-acquisition disputes and lessen the financial burden associated with payment of compensation under that Act. In Land pooling scheme, the compensation in the form of reconstituted plot or land is provided to landowners. However, the existing provisions of the Act do not provide for exemption from tax on transfer of land under the land pooling scheme as well as on transfer of Land Pooling Ownership Certificates (LPOCs) or reconstituted plot or land. With a view to provide relief to an individual or Hindu undivided family who was the owner of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent years. [Clauses 6 25] Special provisions for computation of capital gains in case of joint development agreement Under the existing provisions of section 45, capital gain is chargeable to tax in the year in which transfer takes place except in certain cases. The definition of 'transfer', inter alia, includes any arrangement or transaction where any rights are handed over in execution of part performance of contract, even though the legal title has not been transferred. In such a scenario, execution of Joint Development Agreement between the owner of immovable property and the developer triggers the capital gains tax liability in the han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed as per provisions of the Act without taking into account this proposed provisions. It is also proposed to define the following expressions competent authority , specified agrement and stamp duty value for this purpose. It is also proposed to make consequential amendment in section 49 so as to provide that the cost of acquisition of the share in the project being land or building or both, in the hands of the land owner shall be the amount which is deemed as full value of consideration under the said proposed provision. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent years. It is also proposed to insert a new section 194-IC in the Act so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 and the cost of improvement shall include only those capital expenses which are incurred after 01.04.2001. Consequential amendment is also proposed in section 48 so as to align the provisions relating to cost inflation index to the proposed base year. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent years. [Clauses 28 24] Expanding the scope of long term bonds under 54EC The existing provision of section 54EC provides that capital gain to the extent of ₹ 50 lakhs arising from the transfer of a long-term capital asset shall be exempt if the assessee invests the whole or any part of capital gains in certain specified bonds, within the spec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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