Tax on Notional Rent of Property held as stock in trade

[Tushar More]

Dear All,

The Finance Bill 2017 proposes to amend Section 23 of the ITA to exempt them from having to pay tax on notional rental income from house property which is held as a stock-in-trade for a period of one year from the end of the FY in which the certificate of completion of construction of the property is obtained from the competent authority.

My query is whether a real estate developer having 5 unsold flats since 2010 have to pay tax on the estimated annual rent for period prior to AY 2018-19. Further since when is the tax is to be paid. Also mention the section requiring the same.

AI Summary

Amendment to Section 23: Real estate developers exempt from tax on notional rental income for one year post-completion. The Finance Bill 2017 proposes an amendment to Section 23 of the Income Tax Act, exempting real estate developers from paying tax on notional rental income for properties held as stock-in-trade for one year after obtaining a completion certificate. A query was raised regarding whether a developer with five unsold flats since 2010 must pay tax on estimated annual rent for periods before Assessment Year 2018-19 and the applicable section for this requirement.