By Accommodation Times Bureau
As government have submitted to Bombay High Court in the matter of RERA that nearly 5.5 lakh houses are unsold inventory, obviously the govt must have had the detail list of the inventory. All the unsold inventory is taxable under the house property. This is to make investor enter into agreement with builder so that government gets its Stamp Duty, Registration and other taxes.
By inserting sub-section (5) to section 23 legislature put bar on all the controversies on taxation of unsold flat held as stock in trade. Now, annual value (as per section 23) of all unsold flats held as stock in trade retain by developer for more than 1 year from end of the financial year in which completion certificate granted by the competent authority will be taxable under house property head .
Now any inventory kept in stock in trade after OC received in a financial year, taxable from the next financial year as rent earned from house property. The rent is standard rent determined according to market trend in that area.
Builder who are keeping huge inventory or unsold inventory for more than a year are subject such provisions of Income Tax Act/