Wednesday, January 30, 2008

Farmhouses, villas and residential properties on the outskirts of the city may come into the capital gains and wealth tax net

Budget 2008 may enhance the notified area under local urban development authority from the present 8 km.

Today, wealth tax is imposed if land is situated 8 km from the local limit of a municipality or a corporation.

Agriculture land within the notified area limit, which has not been used for more than two years for farming practice, attracts capital gains when sold.

Moreover, with the move, the government will be able to bring the land that has been converted and used for purposes other than farming into tax net. This would bring several realty players in the tax net as they are increasingly taking over such land and building farmhouses.

The government feels that with the enhancement in the 8-km radius, it may be able to tax big real estate deals transacted beyond the radius.
-Economy-News-The Economic Times

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