Fin Min issues fresh clarification on immovable property disclosure under IDS 2016

19 August, New Delhi

The Finance Ministry in its clarification has said the period of holding of assets declared under the Income Declaration Scheme 2016, shall be taken on the basis of the actual date of acquisition of such asset and not from June 1, 2016 as clarified earlier.

Now, it has once again clarified that under the scheme, this will only be applicable for determining holding period of an immovable property for which the date of acquisition is evidenced by a deed registered with any authority of the state government. However, for assets other than immovable property declared under the scheme, the holding period shall start from June 1, 2016 for purpose of computation of capital gains.

Clarification was sought as to whether this will apply to all assets declared under the scheme or it is limited to only immovable property. Fifth Set of Frequently Asked Questions (FAQs) was issued yesterday clarifying certain issues relating to the scheme.

As explained in the said answer, the clarification was issued considering the fact that investment in an immovable property may be funded partially from undisclosed and partially from disclosed sources. In such cases, if the property is sold in near future, gains from part of the property may be long term and the balance may be short term. This shall cause undue hardship to the declarant. Therefore, the clarification issued relates only for determination of holding period of immovable property.