Capital gains tax exemption proposed for Amaravati must be given to Delhi too
Amaravati, the new capital of Andhra Pradesh, is being constructed by innovative landpooling mechanism without the use of the Land Acquisition Act. Capital gains tax will be exempted for persons holding land from which some part was pooled for creation of the state capital of Andhra Pradesh. The tax benefit depends on the value of the land given up by the farmer, according to the budget proposals.
Those who held land on June 2, 2014 and sold it to the government to carve out the new capital will benefit from the tax waiver. Over 20,000 farmers have given up land under the Land Pooling Scheme (LPS) for the development of the new capital city. The exemptions are retrospective and are applicable for transfer of capital assets, both land and buildings.
So shouldn’t Delhi be given the same priority? After notification, the land-pooling policy of Delhi is currently languishing due to lack of political will, thereby leading to an increase in slums and unauthorised developments. It has been almost three years now.
Farmers, whether in Amravati or Delhi, deserve the same exemption. This is because Delhi is India’s only city state, which is 100% urbanised according to the Master Plan of Delhi 2021 or MPD 2021. The stated Farmers in Andhra Pradesh, who surrendered their land to the government for its upcoming capital city Amaravati, will not have to pay capital gains tax on land sale proceeds Those who held land on June 2, 2014 — when Andhra Pradesh was bifurcated to carve out Telangana, India’s youngest state — and sold it to the government will benefit from the tax waiver, finance minister Arun Jaitley vision is to “develop Delhi into a world-class megapolis. Land is either an inherited or longterm investment asset, and so valuation is largely subjective. There is also a projected need for almost 1.6 million affordable residential units and 130 million sq ft of workspace.
Governments, both at the Centre and the state level, need to understand that the average said in his budget speech Over 20,000 farmers have given up land under the Land Pooling Scheme (LPS) for the development of the new capital city Capital gains tax will be exempted for persons holding land from which land was pooled for creation of the state capital of Andhra Pradesh. The tax benefit depends on the value of the land given up by the farmer per capita land holding in Delhi would be less than half a hectare, and the only way to aggregate 56,000 hectares will be through the incentives route. This would help channelise billions in institutional investments into land and future developments.
If a robust manufacturing sector is to be developed, the government needs to extend facilitation and incentives towards raw materials for programmes, including Make in India and Start up India. So why can’t land be treated as the most crucial raw material for planned urbanisation of Delhi? MPD 2021 is the last phase of development of Delhi and 100% land is likely to be consumed for development. All possible incentives need be extended so that government agencies have access to identified land parcels to roll out the new infrastructure.
The lieutenant governor of Delhi, through an executive order, had ordered that the inter-department transfer of land for development projects in the Capital must attract only a notional fee. Even government agencies need to be incentivised to roll out physical and social infrastructure in a time-bound manner. Let’s not forget that almost 40% of the total land in Delhi would be available to DDA under the land-pooling policy.
Treat land like raw material for affordable housing, considering that the projected population in the NCT of Delhi is around 2.3 crore. There is also an urgent need for more workplaces.
Land pooling is the only way forward, and now is the best time to establish Delhi as the political, economic and development capital of India. The author is the founder director of Certes Realty Limited, a New Delhibased niche advisory and transaction organisation
Source: HT estates
Dated: 11th February 2017