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No Income tax for Promoters & Builders?

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No Income tax for Promoters & Builders?

Last updated: July 27 2010
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  • No Income tax for Promoters & Builders?

    In one of the article Published in Sakal Property on Saturday 24th July 2010, it is mentioned that there is not Income Tax for Promoters & Builders since last 5 years. This policy is to promote the RE secotr as per the author of that article. Is it really true? I was shocked to read this.

    If it's true then it's ironic. One one side poor buyer is paying all sort of taxes right Stamp Duty, Registration, VAT, now Sales Tax and on top of that he pays Income Tax. But builders who are ripping profits like anything are not entitled to Income Tax? Is this sanity? Is govt not biased towards builder lobby?

    Jitu_Sir,

    Could you please clarify this?
  • #2

    #2

    Re : No Income tax for Promoters & Builders?

    Originally posted by rsatitkar View Post
    In one of the article Published in Sakal Property on Saturday 24th July 2010, it is mentioned that there is not Income Tax for Promoters & Builders since last 5 years. This policy is to promote the RE secotr as per the author of that article. Is it really true? I was shocked to read this.

    If it's true then it's ironic. One one side poor buyer is paying all sort of taxes right Stamp Duty, Registration, VAT, now Sales Tax and on top of that he pays Income Tax. But builders who are ripping profits like anything are not entitled to Income Tax? Is this sanity? Is govt not biased towards builder lobby?
    Yes, it is true & the builders have been given this provision under 80IB. Under this, all flats less than 1500 sq ft sold by the builder will be free from any income tax. The point is the possession should be given before Mar 2011. This is the sole reason why many builders prefered white money as it was tax free.

    The intention of the govt (just to fool public) was this NO INCOME TAX to the builder would translate into affordable housing to masses as builders will pass on this benefit to the buyers. However, builders as usual, didn't pass on this benefit making govt poorer, & builder richer at the cost of govt!! It is the mango man who buys houses here suffers the most. He pays to bank, builder & govt . So, loot the govt man, avoid paying taxes honestly.
    If you are happy, you are successful.

    Comment

    • #3

      #3

      Re : No Income tax for Promoters & Builders?

      Originally posted by rsatitkar View Post
      In one of the article Published in Sakal Property on Saturday 24th July 2010, it is mentioned that there is not Income Tax for Promoters & Builders since last 5 years. This policy is to promote the RE secotr as per the author of that article. Is it really true? I was shocked to read this.
      Jitu_Sir,

      Could you please clarify this?
      Dear rsatitkar,
      As clarified by realacres, this comes under special IT Scheme of 80IB which was introduced by then Finance Minister Yashwant Sinha whereby builder needs to construct flat with saleable areas less than 1500 in Pune and 1000 in Mumbai. This was applicable to only those schemes which got their sanctions under 80IB. As of now this scheme is discarded.
      Jitendra Pethkar | Pethkar Projects

      Comment

      • #4

        #4

        Re : No Income tax for Promoters & Builders?

        Originally posted by realacres View Post
        Yes, it is true & the builders have been given this provision under 80IB. Under this, all flats less than 1500 sq ft sold by the builder will be free from any income tax. The point is the possession should be given before Mar 2011. This is the sole reason why many builders prefered white money as it was tax free.

        The intention of the govt (just to fool public) was this NO INCOME TAX to the builder would translate into affordable housing to masses as builders will pass on this benefit to the buyers. However, builders as usual, didn't pass on this benefit making govt poorer, & builder richer at the cost of govt!! It is the mango man who buys houses here suffers the most. He pays to bank, builder & govt . So, loot the govt man, avoid paying taxes honestly.
        I guess this 1500 sqft must be "carpet area" & does not include balconies, terraces, etc. So in theory (as shown by builders on paper) even a 2500 sqft (saleable area) penthouse comes under "affordable housing" LOL. So each & every builder is making houses for the "mango man"?? & claiming tax benefits for the huge sacrifices he makes!!. I am sure one of the builders on this forum - Mr Jitu / Sachin Kulkarni can confirm this?

        Comment

        • #5

          #5

          Re : No Income tax for Promoters & Builders?

          Originally posted by ajoshi565 View Post
          I guess this 1500 sqft must be "carpet area" & does not include balconies, terraces, etc. So in theory (as shown by builders on paper) even a 2500 sqft (saleable area) penthouse comes under "affordable housing" LOL. So each & every builder is making houses for the "mango man"?? & claiming tax benefits for the huge sacrifices he makes!!. I am sure one of the builders on this forum - Mr Jitu / Sachin Kulkarni can confirm this?
          C'mon man, the politicos get their cut in builders profits...who the hell cares where the citizens & country is headed towards.
          If you are happy, you are successful.

          Comment

          • #6

            #6

            Re : No Income tax for Promoters & Builders?

            Originally posted by ajoshi565 View Post
            I guess this 1500 sqft must be "carpet area" & does not include balconies, terraces, etc. So in theory (as shown by builders on paper) even a 2500 sqft (saleable area) penthouse comes under "affordable housing" LOL. So each & every builder is making houses for the "mango man"?? & claiming tax benefits for the huge sacrifices he makes!!. I am sure one of the builders on this forum - Mr Jitu / Sachin Kulkarni can confirm this?
            Dear ajoshi,
            The area restriction of 1500 sfts is on Saleable area including carpet, balconies, terraces etc which is shown in registered agreement.
            Jitendra Pethkar | Pethkar Projects

            Comment

            • #7

              #7

              Re : No Income tax for Promoters & Builders?

              Originally posted by Jitu_Sir View Post
              Dear ajoshi,
              The area restriction of 1500 sfts is on Saleable area including carpet, balconies, terraces etc which is shown in registered agreement.
              Jitu, in agreement the built up area in mentioned right? So, 1500 sq ft would mean 1250+ in agreement, right? Btw, I think this is the reason why many builders had areas like 1495 , 1498 sq ft & so on!!
              If you are happy, you are successful.

              Comment

              • #8

                #8

                Re : No Income tax for Promoters & Builders?

                Originally posted by realacres View Post
                Jitu, in agreement the built up area in mentioned right? So, 1500 sq ft would mean 1250+ in agreement, right? Btw, I think this is the reason why many builders had areas like 1495 , 1498 sq ft & so on!!
                Dear realacres,
                You got it right.
                Jitendra Pethkar | Pethkar Projects

                Comment

                • #9

                  #9

                  Re : No Income tax for Promoters & Builders?

                  Originally posted by Jitu_Sir View Post
                  Dear ajoshi,
                  The area restriction of 1500 sfts is on Saleable area including carpet, balconies, terraces etc which is shown in registered agreement.
                  If this is so - I stand corrected.
                  Thank you - Mr Jitu

                  Comment

                  • #10

                    #10

                    Re : No Income tax for Promoters & Builders?

                    Thanks

                    Thanks Jitu_Sir & Realacres for your reply. This was a new information to me. It's really ironic that on one side govt is passing all possible tax burdens to 'mango man' & giving tax benifits to rich builder lobby. Total injustice. This can happen only in India.

                    One one side there are poor buyers who are buying the flats in fringe areas with almost no infra (as they can not afford in established areas) & just managing to pay their EMIs & still they are loaded with numerous taxes & on other hand there are builders who have already ripped & still ripping hepty profits, staying in luxuty bunglows at premium locations, using premium seg cars like Merc, BMW & they are not required to pay any Income Tax. Totally frustrating.

                    Truely India is shining!!

                    Comment

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