Share Post Union Budget 2019 Reactions for Indian Real Estate Sector
Although issues like single window clearance and Input Tax Credits (ITC) benefits in GST weren’t addressed, multiple pro-industry reforms majorly outweigh the few misses - Mr. Madhusudhan G., Chairman and MD, Sumadhura Group.
This is a well calibrated ‘Scale up India’ Budget focused on Start – ups and Rural India; bringing ‘Connectivity’ as the major thrust area to minimise the rural and urban divide. The proposal to make INR 100 lakh crores investment towards infrastructure in the next five years is reflective of the importance placed on employment and the GDP, by the government.
Proposal to construct 1.95 crore houses under PMAY -GRAMIN itself will have a positive impact on the economy. Investments in housing by home buyers, upto INR 45 lakhs, will receive further impetus by way of additional income tax incentives that will further augment affordable housing. Additionally, introducing a modern tenancy law will go long way in encouraging Rental Housing.
The Budget has also rightly appreciated the urgent need for improving liquidity in the economy following the NBFC crisis. Increasing the turnover limit to INR 400 crores for the lower corporate Tax of 25 %, will also greatly help many mid-sized corporates.
"In the matter of further support to the real estate sector, especially to housing, the industry is confident that the Finance Minister will revisit the sector’s expectations including initiatives such as, Single window clearance for approval, rationalisation of tax and stamp duty across the country, as these will greatly benefit home buyers in terms of the price they pay" - M Murali, Chairman and Managing Director, Shriram Properties Ltd.
“This year’s budget has announced encouraging developments for some segments of the start-up community in India. Bringing more companies with an annual turnover of up to INR 400 crore under the lower corporate tax bracket of 25% is an encouraging move and it will help many companies have better liquidity. We were hopeful that the government will abolish Angel Tax. However, the measures to ease scrutiny from Income tax department by the introduction of e-verification for investors will definitely ease many budding businesses. It is also reassuring that measures have been taken to carry forward and set off losses for start-ups and increase the period of exemption of capital gains arising from the sale of residential house for investment.” - Mr. Tanuj Choudhry, Chief Business Officer & Board Member, HomeLane.
"The proposal to allow an additional tax deduction of 150,000 rupees on interest paid on housing loans for self-occupied house owners and an Additional ₹1.5 lakh income tax deduction on home loan interest paid for buyers of affordable homes till March 2020 is likely to be an effective point in the sector and the fact that the finance sector regulation changed from NHB to RBI will have a beneficial impact on the investments. This will redefine the income definitions and the reforms that are made to promote rental housing will take this sector to a new height." - Neh Srivastava, Under Secretary Ministry of Home Affairs & President CSSOS.
"The Government took the initiative to address the affordable housing with only 13lakh homes constructed so far out of 81 lakh homes under PMA, since there is increase in threshold value numbers from 25 % - 35% Under PMA-2, it is likely to meet the demands of successful tax reforms, the real estate sector is likely to grow based upon this data, However to meet the Numbers the real estate sector and the players of affordable housing needs to adapt this quickly." - Mohit Bhambri, Co-Founder, Hedge Homes.
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