On June 15, the revised draft for the Direct Tax Code was released. This code is a try by the Indian government to simplify the laws of income tax. The government is waiting for the Parliament to pass the code and plans to adopt it from April 1, 2011.
Below is the list of some must know changes proposed in the draft code with respect to realty sector.
Short-term capital gains: As per the proposals, tax will be imposed on any gain or loss made on the sale of an asset within a year.
Long-term capital gains: The proposed laws say that after an year of purchase, the taxation policy on any gain or loss made on the sale of an asset will be implemented as per the long-term capital gains tax policy.
As per the draft code, from April 1, 2011, April 1, 1981 will not be considered for calculating the discount rate; rather April 1, 2000 will be considered for the same.
Rental Income Taxation Policy: The draft code has proposed that the gross rent should be calculated on the actual rent receivable or received for the financial year.
Home loan Interest Rates: The draft DTC intends to keep on deducing tax on the interest paid on home loans up to Rs 1.5 lakh for construction or purchase of residential property.
Self Occupied House Property: Any self occupied house property (property not been let out) will be allowed for deduction on account of interest to the tune of Rs 1.5 lakh.
This revised draft code of the DTC has come up as a boom for the home buyers and home owners. The revision seems to be beneficial for all, be it is investors or developers.
