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The Real Estate fraternity is expecting few big sweeps at the Union Budget 2020
Real Estate

The Real Estate fraternity is expecting few big sweeps at the Union Budget 2020

The real estate fraternity is expecting few big sweeps at the ‘Union Budget 2020’. Ashish R Puravankara, Managing Director, Puravankara, shares:

“Real Estate will have a huge part to play in India INC’s journey to a Rs 5 trillion economy, and boosting the sector will help in employee generation and have other beneficial cascading effects. We expect government to expand its gambit of incentives to the industry at large, which will further amplify the momentum displayed in 2019. 

Some of the key expectations from the budgets are:

  • While affordable housing has received an infrastructure status, a clear roadmap needs to be provided for the implementation of the same. Granting industry status to the entire real estate sector; it has been a longstanding demand from realty fraternity.
  • Consider repealing the charges to the developer on the unsold inventories and no cap for loss from house property.
  • While implementing the IND AS 115 in the real estate sector, profit which had suffered tax earlier has been brought back to books as the revenue can be recognised upon completion of the apartment and delivery to the customer. There is no clarity regarding the applicability of MAT on such profits which comes to the Profit & Loss account second time by way of transfer from Reserves.
  • Lower GST on materials to 5 per cent from 18 per cent  and give input tax credit on building materials used for affordable and mid-segment homes.
  • No GST on properties developed for lease from current level 18 per cent.
  • Customer facing financing: Minimising the differential between rent and EMI, and increase in standard deduction from 30 per cent to 45-50 per cent (there has been no increase since 2002).
  • Introduce policies to encourage sustainable construction practices, and bring in a robust long-term plan to strengthen the ecosystem of the industry by weeding out the existing anomalies.
  • CSR expenditure should be allowed as a tax deductible expenses.

While aligning itself to the new structural blueprint, the expectations from all stakeholders in real estate industry are high, not just as India INC is moving towards a burgeoning economy but also for the clarion call of ‘Housing for All’.

We believe that rapid urbanisation and white-collar migration will ensure strong growth of the commercial sector which will in turn translate into higher residential demand. Also, in commercial segment, warehousing and retail will add more steam to the vertical in immediate future; especially, in the backdrop of $1 billion investment commitment by Amazon.

While we hope that this Budget will address all the requirements to boost the growth of real estate sector, there needs to be a two-pronged approach to reach the Rs 5 trillion economy mark. We are hoping that the government will provide a viable roadmap to accelerate overall consumption, especially in rural India, by pumping more capital into agriculture. The same will have a positive impact across industries and go a long way towards boosting the economy.

The real estate fraternity is expecting few big sweeps at the ‘Union Budget 2020’. Ashish R Puravankara, Managing Director, Puravankara, shares:“Real Estate will have a huge part to play in India INC’s journey to a Rs 5 trillion economy, and boosting the sector will help in employee generation and have other beneficial cascading effects. We expect government to expand its gambit of incentives to the industry at large, which will further amplify the momentum displayed in 2019.  Some of the key expectations from the budgets are:While affordable housing has received an infrastructure status, a clear roadmap needs to be provided for the implementation of the same. Granting industry status to the entire real estate sector; it has been a longstanding demand from realty fraternity.Consider repealing the charges to the developer on the unsold inventories and no cap for loss from house property.While implementing the IND AS 115 in the real estate sector, profit which had suffered tax earlier has been brought back to books as the revenue can be recognised upon completion of the apartment and delivery to the customer. There is no clarity regarding the applicability of MAT on such profits which comes to the Profit & Loss account second time by way of transfer from Reserves.Lower GST on materials to 5 per cent from 18 per cent  and give input tax credit on building materials used for affordable and mid-segment homes. No GST on properties developed for lease from current level 18 per cent.Customer facing financing: Minimising the differential between rent and EMI, and increase in standard deduction from 30 per cent to 45-50 per cent (there has been no increase since 2002). Introduce policies to encourage sustainable construction practices, and bring in a robust long-term plan to strengthen the ecosystem of the industry by weeding out the existing anomalies.CSR expenditure should be allowed as a tax deductible expenses.While aligning itself to the new structural blueprint, the expectations from all stakeholders in real estate industry are high, not just as India INC is moving towards a burgeoning economy but also for the clarion call of ‘Housing for All’. We believe that rapid urbanisation and white-collar migration will ensure strong growth of the commercial sector which will in turn translate into higher residential demand. Also, in commercial segment, warehousing and retail will add more steam to the vertical in immediate future; especially, in the backdrop of $1 billion investment commitment by Amazon.While we hope that this Budget will address all the requirements to boost the growth of real estate sector, there needs to be a two-pronged approach to reach the Rs 5 trillion economy mark. We are hoping that the government will provide a viable roadmap to accelerate overall consumption, especially in rural India, by pumping more capital into agriculture. The same will have a positive impact across industries and go a long way towards boosting the economy.

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