Lok Sabha Question No. 2414 (UNSTARRED), answered on 2018-03-09
Subject: Regulating Real Estate Sector
Ministry: FINANCE
Asked by: MANOJ RAJORIA

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA

## UNSTARRED QUESTION NO\_ 2414

TO BE ANSWERED ON FRIDAY, MARCH 9, 2018

PHALGUNA 18, 1939-40 (SAKA)

## "REGULATING REAL ESTATE SECTOR"

2414: Dr: MANOJ RAJORIA:

Will the Minister of Finance be pleased to state

- whether the Government has been successful in regulating the transactions taking (a) place in the real estate sector;
- (b) if so, the details thereof; and
- (c) if not; the reasons therefor?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHIV PRATAP SHUKLA)

Madam: Ministry of Housing & Urban Affairs has enacted the Real (a) to (c) Yes, 2016 to ensure, regulation and promotion of Estate (Regulation and Development) Act; the real estate sector and to protect the interest of home buyers.

- the practice of under reporting of consideration for transfer of (€) In order to discourage immovable property, following provisions were incorporated:

concerning transactions in the real estate sector have been taken Further, various steps These include the following in the recent with a view to control black money: legislative changes made under the Income-tax Act; 1961: important past

- 43CA and Section 50C of the Income-tax Act were brought in for adoption of Section consideration if it is more than the declared consideration: stamp duty value as
- Section 56(2)(x) of the Income-tax Act; inter-alia , provides for taxing the amount of the difference between the stamp duty value and consideration received if any, in case the same exceeds Rs. 50,000 in the hands of recipients.
- Section 5OCA of the Income-tax Act read with relevant Rules provides for taking of stamp  duty value of  immovable property held by an unlisted company for the purpose of determination of capital gains on transfer of shares of such company:
- () In order to ensure reporting of high value real-estate transactions, section 194-IA of the Income-tax Act provides for deduction of tax at the rate of 1% if the consideration for specified immovable property exceeds Rs. 50,00,000/paid
- (iii) In order to curb cash dealing in real-estate transactions, Explanation (iv) to section 269SS of the Income-tax Act prohibits receipt of any amount in the nature of advance or otherwise   amounting to Rs. 20,000/ or more for   transfer of   immovable property otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account Similar restriction is provided under section 269T of the Income-tax Act in respect of any repayment of advance taken for transfer of immovable property. Violation of these restrictions attracts penalty of equal amount:
- Rule 114B and Rule 114E of the Income-tax Rule, 1962  provides for mandatory quoting of PAN and reporting of transaction of immovable property, if the consideration exceeds the threshold specified in these rules.

Department of Revenue has also in place a GST regime on the works contract services involving  the real estate sector, which is   self regulatory in nature. The taxation of the real estate sector has been so designed so as to ensure smooth and seamless flow of input tax credits (ITC) from the of raw materials to the final stage of real estate project, bought by the consumer. put stage