In a move that could boost real estate demand, the government will relax income tax provisions to allow a 20 percent differential between sale price and circle rates, Finance Minister Nirmala Sitharaman said.

Reacting to the move, Keki Mistry, Vice Chairman and CEO of HDFC, said it is a welcome move for developers and homebuyers.

“I think it is a positive thing because the ready reckoner prices do not necessarily reflect the true value of a property in any particular location,” he said in an interview to CNBC-TV18.

However, Mistry added that there are circle rates, which are decently high and a limit of Rs 2 crore may not make I-T relief attractive for cities like Mumbai or Delhi where prices are high.

The Finance Minister in her address to media also said that the Emergency Credit Loan Guarantee Scheme (ECLGS) has been extended till March 31, 2021.

Sanjiv Bajaj, CMD of Bajaj Finserv and Vice Chairman of CII, said it is a big development and the focus of the government is to give more support to the economy.

“I did hear the FM talking about it being available for stressed sectors as well which has been one request that CII had made and I think they have taken care of that. So, it is very clearly from the government side a focus to get a broad level upward support to the economy,” he said.

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(Edited by : Bivekananda Biswas)