Rajeev Talwar: A big boost for housing sector

The CEO of DLF Limited said for capital gains, period reduced to two years from three years

We welcome the move to grant infrastructure status to affordable housing. This will surely give the sector an impetus, as it gives builders access to capital at lower interest rates; the benefit can now be passed on to the buyers. Other incentives like change in measurement methodology from build-up area to carpet area and extension of affordable housing scheme to five years from three years will help enhance demand. 

For capital gains, the period has been reduced to two years from three years, which means less capital gain tax for those who intend to sell their house after two years of purchase.

In joint development agreements of property, the liability to pay capital gains tax will arise in the year the project is completed, which will reduce cash outflow for the project.

On the issue of notional tax, earlier the land holder had to evaluate the price of the land held while entering into an agreement with the builder and pay the tax on the notional gains. Now, this payment will be deferred. Notional tax on unsold but ready inventory will be charged only after one year. This will encourage land owners to enter into development agreements with relators and will eventually lead to an increase in supply of properties.