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Tax exemption to Amaravati: What is so great?

Tax exemption to Amaravati: What is so great?

Telugu Desam Party president and Andhra Pradesh chief minister N Chandrababu Naidu and his bandwagon are going ga ga over the capital gains tax exemption given by the Centre on the first sale of plots allotted to farmers who lost their lands under land pooling for construction of new capital Amaravati.

Under the land pooling system, Naidu government had acquired nearly 33,000 acres of land from farmers. In return, each farmer was allotted residential plot of 1,000 square yards and a commercial plot of size ranging from 250 to 450 square yards.

The government assured that the cost of the plots would go up multi-fold with the construction of the new capital. But since the sale of residential and commercial plots would invite levy of capital gains tax, they were worried. So, Naidu ensured that the Centre would exempt this tax on Amaravati plots.

With this, the TDP leaders are on cloud nine as it if is a big achievement and they even distributed sweets among farmers of the affected villages. They went on to claim that the farmers would become millionaires if they sell plots at higher rate once Amaravati is developed.

However, YSR Congress party described it as yet another attempt to fool the farmers of Amaravati.

“It is an agriculture land and any transaction of agriculture land is exempt from capital gains tax. This is being projected as a big boon to farmers. It is nothing but cheating,” party MP V Vijay Sai Reddy said.

Moreover, the exemption is given only up to 2020. It does mean Amaravati would have to be constructed till such time and cost of plots would go up. But does it happen?

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