Fixation of Tax slabs: Builders & Real estate Developers.
• Tax liability will be computed on square feet/yard, & will be facilitated in quarterly installments.
• All New projects, along all existing incomplete projects, can be benefited to this the scheme up to 31.12.2020.
• Existing incomplete &unfinished projects must declare the completion percentage of completion of the project on the relevant date.
• Completion of the registered Projects must not exceed 30th of September 2022.
• Withholding tax exemption on the purchasing of nearly all building materials, except for steel & cement.
• Acquisition of services on the withholding tax relating to construction can be admissible for special needs & projects.
• Incorporation of 10x of fixed tax paid as income in books of accounts is permissible.
• Reduction of 90% in fixed liability of tax for low-cost & low budgeted housing.
• Builders or developers paid dividend shall not be liable to any tax, along with null withholding tax on these dividends.
Section 111 Exemption & Investments for Projects
Any or all Capital investments of made by a company/AOP in a new constructional project shall not face any probing under following conditions
• A single enterprise with purpose or AOP which is being registered between the time lapse of 17th of April 2020 Till 31st of December 2020.
• Capital which is being invested through a crossed banking means up-to 31st of December 2020, or a Land that is owned by a partner/shareholder & is transferred to this business entity/ till 31st of December 2020.
• Land or capital invested is being utilized in the project.
• Project completion is projected & finished by max 30th of September 2022.
• Builders in this case, Grey structure must be completed till & roof per plan is laid.
• In case developer’s, all landscaping is & all roads are laid up to sub-grade level.
• Whereas 50% plots in the inventory are sold & the least 40% of sales receipts are received.
Exemption from Section 111 on Purchase of a Plot
For plots:
• Plot or the Land is purchased & documented till the 31st of December 2020 & all payments are being made through banking channel under the same limited date mentioned.
• Construction on such plot or land must also be initiated before or till 31st of December 2020 & completed before the 30th of September 2022.
For buildings:
• Project must be registered when purchased, & the buyer must be the first purchaser of the building.
• The purchase has to be made before 30th of September 2022 (along with all payments must be made through the banking channel).
Exemption from Section 111 is Not Available for:
• Any/All Public officeholders,
• Any/All Public companies, REITs, and companies whose income is exempt,
• Any/All Proceeds of crime.
Conclusive additional notes:
• Exemption of tax on capital gain on the sale of personal accommodation of size up to 500 sq. yard house or 4000 sq. feet apartment one-time only.
• In regards to import of plant and machinery, feasible for construction & building exemption can be obtained industrial undertaking status.
• The tax & the auction of immovable properties has been reduced to 5 % from 10%. Moreover, the CVT also being reduced shares has been withdrawn in ICT.
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