Pranab gives service tax relief to house buyers
Apr 2010:
Finance minister Pranab Mukherjee, on April 29, announced several relief measures which will benefit house buyers, air travellers, coffee growers and steel manufacturers, among others, while replying to the debate on the budget in the Lok Sabha. The measures are expected to cost the exchequer around Rs 400 crore.
However, he did not accept the demand for rolling back of the hike in petroleum and fertilizer prices, which led to a walkout by the opposition before the Lok Sabha passed the Finance Bill, 2010.
The government has provided tax relief to house buyers by increasing the abatement on the value of house property from 67% to 75% to levy service tax. That means, the service tax at the rate of 10.3% will now be levied on 25% of the value of the house instead of 33% as was proposed in the Budget.
This will reduce the service tax component by 0.83 percentage points from 3.4% to 2.57%. That means, in a house worth Rs. 50 lakh, the service tax component will come down by Rs. 41,500 and on a house of Rs 1 crore, the benefit will be of Rs 83,000. Mukherjee also exempted low cost housing for the urban poor under the JNNURM and under Rajiv Awas Yojna from service tax.
Source: MagicBricks | Back to Realty News