Budget 2020: Abolish property circle rate from Income Tax Act – Real estate expectation

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New Delhi | Updated: January 6, 2020 4:19:35 PM

Budget 2020 India expectations: The industry expects Budget 2020 to announce industry status to the real sector that will further help in raising low-cost funds and make land acquisition much simpler.

Budget 2020, Finance Minister Nirmala Sitharaman , Budget 2020-21, Budget 2020, Budget 2020 income tax, Union Budget 2020, REAL ESTATE, RERA, REITS,Budget 2020 Expectations: There are expectations from the Finance Minister Nirmala Sitharaman to revive the home buyer interest in the real estate sector.

Budget 2020 India expectations: The real estate sector has big expectations from the upcoming Budget 2020 and wants to see several doles being handed out by Finance Minister Nirmala Sitharaman to revive the home buyer interest in the sector. Affordable housing was already given the infrastructure status in the past and that in addition to other benefits was aimed at enabling developers avail tax concessions and get access to low-cost loans from banks apart from foreign and private capital. The sector expects the Budget 2020 to announce industry status to the real estate sector that will further help in raising low-cost funds and make land acquisition simpler.

Several other initiatives taken in the recent past such as forming of Real Estate (Regulation and Development) Act, 2016 (RERA), Real Estate Investment Trusts (REITs), the Benami Transactions (Prohibition) Amendment Act 2016, higher tax breaks on home loans etc. are also some of the steps towards making real estate a more robust sector for the future. In an email-interview with FE Online, Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani shares his views on the expectations from the Union Budget 2020.

What are your Budget 2020 expectations from the government that can see a revival of demand for residential projects?

To bring back growth in the real estate sector, which is so vital to any developing economy, it is important for the government to impart industry status to the real estate sector which would enable developers to cut capital costs and pass on the benefits to consumers.

We are also expecting a single-window clearance mechanism which has been a long-pending demand from the sector as it will help in quicker completion of projects. We also expect the implementation of land reforms and greater liquidity to NBFCs in the market, which will prompt more investors to come in.

Apart from these, elimination of taxes on vacant property, dropping circle rates section from Income Tax Act, increasing the limit of interest deduction paid on a home loan, ensuring tax rationalization on REITs and lowering costs of land acquisition are some of the measures that will positively impact the sector.

All these measures will help in streamlining the industry in the long-run. We hope the government takes more developer and investor-friendly initiatives for the betterment of the real estate market in the upcoming budget.

How crucial is the Stamp Duty costs in real estate transactions? What is your suggestion to the government?

Payment of stamp duty bestows a record of confirmation by the government on to a transaction. The government also gains huge revenue through their stamp duty collections. To that extent, the government is a stakeholder in every real estate transaction.

Therefore, the government should take into consideration that the added burden of very high stamp duty is a genuine deterrent in adverse market conditions and take steps to provide incentives by way of rationalised stamp duty to ensure that adequate buffers are given to both the developer and the home buyer to conclude the transaction.

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