New Delhi | Jagran Business Desk: In a major boost for the real estate sector in India, the central government on Thursday said that income tax relief will be given developers and home-buyers to increase the demand for residential real estate.

While annoucing the 'Atmanirbhar Bharat' 3.0 package, the Finance Minister said that providing relief on sale of housing units "will reduce harships faced by both home-buyers and developers and help in clearing the unsold inventory".

"For primary residential real estate sales, relief on the difference between circle rate and agreement value up to 20 per cent vs 10 per cent earlier. We expect clearance of inventories through this step," Sitharaman was quoted as saying by news agency ANI.

Sitharaman said that the move will help middle class families across the country and said that they will be able to buy "when the housing sector is sitting on inventories". She further informed that the central government will also make the amendments in the income tax act soon.

"The government has decided to increase the differential from 10 per cent to 20 per cent under Section 43(CA) of the IT Act till June 30, 2021," she said.

With the government annoucing a relief for home-buyers and builders, the bank guarantees for construction activity will be reduced to 3 per cent of the overall project value which was 10 to 15 per cent earlier. It is expected that this move will reduce burdern on contractors and ensure greater liquidity to firms.

The Indian economy has been hit hard by the coronavirus pandemic and the subsequent lockdown that imposed to control the spread of the infection. However, the Finance Minister on Thursday informed that the Indian economy is witnessing a strong recovery.

She further informed that COVID-19 mortality rate in India is just 1.47 per cent and the number of active cases has declined from over 10 lakh to 4.89 lakh.

Posted By: Aalok Sensharma