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Tax News4

The Central government is mulling ways to ensure homebuyers receive their dues as insolvency proceedings are initiated against more companies on the lines of those against  

 

This is being done keeping in mind that the salaried middle class, who invest their life’s savings in these houses, constitute a vocal constituency.

 

A corporate affairs ministry official said homebuyers would be placed above bankers in insolvency cases. The government wanted to ensure that homebuyers did not have to take a haircut, the official added.

 

Homebuyers could be made trustees so that their money cannot be used to pay back creditors. Another plan is to ensure the projects are completed and homes delivered even as a builder goes under.

 

“Elevating homebuyers to the status of trustees will require a notification, and if decided upon, can be done quickly. The other option is to raise their status on a par with large secured creditors. That will require amending the Insolvency and Bankruptcy Code (IBC) and will take time,” a source said.