The Central government has given its nod to the Income Tax department to tax all unsold apartments held by real estate developers across the country, with the tax being calculated based on their current market rentals.
The tax will be levied on unsold flat by treating it as ‘income from house property’ under Section 43-CA of the I-T Act, 1961. It will be effective from this fiscal year 2015-16, tax officials said.
“The government has decided to tax ‘notional rent’ on the unsold inventory lying with the developers. This will certainly induce builders to sell flats and not to hold them awaiting price escalation in future. Such tax will force builders to sell property in competitive price.”