New Delhi: The Real estate sector has demanded several tax relaxations for the housing sector to help it tackle the COVID-19 led crisis that has crippled the sector. The housing sector has also demanded the government to extended Rs 2 lakh tax deduction on interest paid on home loans.
The dates of the Budget session are yet to be announced, though it is expected that Finance Minister Nirmala Sitharaman wiill present the Budget 2022-23 on February 1 as has been practised since a couple of years now.
Dr. Atul Goel, MD, Goel Ganga Group & President (Elect.), NAREDCO Pune said, "While the real estate sector is looking at a robust housing demand revival in 2022, it also expects the Union Budget 2022 to play a supportive and enabling role. The real estate sector is looking at a few tax relaxations such as hike in Rs 2 lakh rebate under section 24, as in the aftermath of the pandemic, the profit margins are already low and developers have to compensate for the lost time. A single window clearance mechanism has remained a demand for many years now."
Goel has also urged the government to award industry status to the real estate sector.
"It is an opportune moment to award industry status to the real estate sector so that it can avail cheaper credit facilities from financial institutions. In addition to this, a GST waiver for under-construction properties, and incentives for private investment in affordable housing sector will be enabling. Easing of liquidity and short term tax holidays might go a long way in boosting overall recovery of the realty sector," he said.
Nakul Mathur, MD, Avanta India has urged the finance minister to reduce the TDS deduction rates on coworking spaces as most of the receivables from the client is towards services. It would be best if the finance minister considers to bring coworking spaces into 2% TDS slab as in case of services from the present 10% . This will immensely help the coworking spaces in management of their cashflows.
Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management said that real estate is one of the key pillars of the Indian economy contributing around ~ 8% to the overall GDP. The government must acknowledge the important role played by the sector and make deep policy reforms to accelerate growth in realty demand. Currently, concession can be availed in income tax on up to 2 lakhs paid as interest on home loans.
"This should be revised and increased to build healthy demand in the sector. Likewise, waivers or reductions should be offered on GSTs on raw materials such as cement, steel, etc. Raw material prices are increasing and reduction in GST rates can give a lot of relief to the developer fraternity. Giving infrastructure status to the sector is also long due as it can help in building liquidity in the sector," Maurya added.
Ramani Sastri - Chairman & MD, Sterling Developers Pvt. Ltd said that he expects input tax GST credit for developers, reduction in stamp duty which has happened in several states and registration charges which make a sizeable difference to the cost of a project, thereby boosting home buyers' sentiment and encouraging them to go in for property purchase.
"There is need to redefine ‘affordable housing’ to Rs. 50 - 60 Lakhs as this would expand the benefits for homebuyers and therefore boost the end-user demand. The revival of the real estate sector is imperative for the growth of GDP as well as additional employment generation. Overall, we hope that the government, through its policies will do its best to get the economy to bounce back, and sustain long term growth of the real estate sector too with substantial measures for both the homebuyers and the developers," Sastri added.
Farshid Cooper, MD, Spenta Corporation said, " Focus should be given to stalled/ stressed projects, apart from providing impetus to affordable and rental housing as we enter 2022 . This will likely free up capital and provide liquidity to the sector. Additionally, serious thoughts need to be given to GST towards major input materials as the rising cost structure could lead to long term increase in prices thereby softening demand."
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