Tax relief! Govt announces relaxations for home buyers, developers
Union Finance Minister Nirmala Sitharaman on Thursday announced income tax relaxations to allow sale of primary residential units of up to Rs 2 crore value below the circle rate. So far, only 10 per cent difference between the circle rate and the agreement value was allowed. Sitharaman said, the differential has now been hiked to 20 per cent for period up to June 30, 2021 for only primary sale of residential units of value up to Rs 2 crore. "This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory," she said in a presser.
Meanwhile, the minister also announced a Rs 18,000 crore additional outlay for the urban housing scheme to help complete real estate projects that would create jobs and boost the economy. She said the Rs 18,000 crore would be provided over and above the Budget Estimates for 2020-21 for the Prime Minister Awaz Yojana (Urban) through additional allocation and extra budgetary resources. This is over and above Rs 8,000 crore already provided this year. Sitharaman said the move would help start work on 12 lakh houses as well as complete 18 lakh houses. This would create 78 lakh new jobs as well as demand for steel and cement.
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In one of the 12 announcements, the finance minister also announced a new job creation scheme by giving subsidy to those establishments that hire new employees. The subsidy would be to cover for retirement fund contributions by employees as well as employers for two years. Employees contribution (12 per cent of wages) and employer's contribution (12 per cent of wages) totalling 24 per cent of wages would be given to establishments for two years, Sitharaman said.
The subsidy will apply to every Employees' Provident Fund Organisation (EPFO) registered establishment taking new employees under the Aatmanirbhar Bharat Rozgar Yojana. It will cover any new employee joining employment in EPFO-registered establishment on monthly wages less than Rs 15,000. The scheme will cover EPF members drawing monthly wages of less than Rs 15,000, who made an exit from employment during COVID-19 pandemic from March 1, 2020 and is employed on or after October 1, 2020. The scheme would cover establishments registered with EPFO if they add new employees compared to the reference base of employees as in September 2020. The condition would be adding a minimum of two new employees for establishments with up to 50 employees. Those establishments with more than 50 employees, would have to give a minimum of five new jobs. The scheme would be operational till June 30, 2021.
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