Govt plugs loophole to stop illegal profits by developers

Govt plugs loophole to stop illegal profits by developers
Hindustan Times – Business, July 10, 2009, Page 1

The government is bringing an amendment that would prevent you and your closest kin from buying more than one flat in the same building in affordable home projects.

This is applicable for buildings approved for construction of smaller flats of less than 1000 square feet of built-up area targeted at low and middle income households in Delhi and Mumbai and 1,500 square feet elsewhere.

Developers were found entering into agreement to sell multiple adjacent units to a single buyer violating the clauses under which they enjoy 100 per cent tax exemption.

“Accordingly, it is proposed to insert new clauses in the said subsection (10 of section 80-IB of the I-T Act) to provide that the undertaking which develops and builds the housing project shall not be allowed to allot more than one residential unit in the housing project to the same person,” said the proposed amendment of the Finance Bill.

No individual can buy more than one flat, neither the spouse nor minor children can own flats in the same building.
This amendment will take effect from April, 2010.

“The intent of the government is good and it would promote affordable housing. the policy is in the right spirit,” said Anuj Puri, chairman & country head, Jones Lang LaSalle Meghraj (JLLM), a real estate consultancy.