Over 1700 unauthorized colonies in Delhi were regularised in December last year. Owners Delhi’s unauthorised colonies will now get Income Tax Exemption even if they have purchased land or house at rates below the prevailing market price.
The Income Tax Department issued a Notification grating the exemption on any immovable property being land or building, purchased by a resident of unauthorised colony in Delhi NCR and the Central Government has regularised the transactions in favour of resident of such immovable property based on the documents such as latest Power of Attorney, Agreement to Sale, Will, Possession & other documents if any.
The notification is effective from April 1, 2020 and would be applicable for Assessment Year 2020-21 and subsequent years. The Notification dated June 29 exempts the owners of these properties from payment of Income Tax on the differential of Fair Market Value (FMV) and the purchase price. Currently, If the property has been purchased at a lower price than the prevailing circle rate then, the Income Tax is leviable on differential of FMV and the actual purchase price.
All acquisitions before that date of regularisation have been Tax exempted by way of a notification, so that residents don’t have to pay Tax on any notional income, even if FMV as on date of regularisation is more than the purchase price of such property.