Rs 1000cr tax notice served on top real estate developer –DLF

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The Haryana Income Tax authorities have issued a notice to the country’s largest real estate developers to pay up Rs 1000crore as taxes, after they rejected the company’s claim that income earned from leasing out SEZ (special economic zone) properties was exempt from tax.
DLF had earned Rs 2500crore by leasing out SEZ properties in Gurgaon and Chennai during the FY 2008-2009 and they did not deduct any taxes on the same. DLF claimed that the such income was exempt under the provisions of IT Act, 1961 or SEZ Act. The IT department however passed a judgement stating that ‘ taxes were to be paid on such incomes earned as short term capital gains , as this money had been earned from the transfer or the sale of the SEZ properties.’ The authorities also clarified that income on the sale of SEZ assets was neither exempt under the IT act nor the SEZ act.
DLF has now been asked to pay taxes to the tune of RS 750 crore and interest on the same, summing the amount to over RS 1000crore.