De­vel­op­ers want realty bills fast-tracked

Want clar­ity on real es­tate reg­u­la­tory bill and Smart Cities ini­tia­tive

HT Estates - - HTESTATES - Van­dana Ram­nani

Ap­proval of t he Real Es­tate Reg­u­la­tory Bill that was de­ferred in the win­ter par­lia­men­tary ses­sion, fast-track­ing pas­sage of amend­ments to the Land Acquisition Act 2013, more clar­ity on the Smart cities ini­tia­tive and faster project ap­provals. Hopes are high in the realty sec­tor of some clar­ity on th­ese is­sues in Bud­get 2015.

“As we move closer to Bud­get 2015–16, In­dia’s real es­tate sec­tor is hop­ing for some key ex­pec­ta­tions to get im­ple­mented. We are still await­ing the Or­di­nance with the lat­est amend­ments to the Land Acquisition Act, 2013, to be fi­nally passed in Par­lia­ment. One hopes that the new Act will be im­ple­mented soon, to­gether with more in­cen­tives for the low cost/af­ford­able hous­ing seg­ment. More clar­ity is also sought on the Smart Cities ini­tia­tive on mone­tary al­lo­ca­tion, spe­cific time­lines, fi­nalised lo­ca­tions and the broad plan of ac­tion,” says An­shu­man Mag­a­zine, chair­man & MD, CBRE South Asia Pvt Ltd, said.

In­crease in in­ter­est de­duc­tion is yet an­other de­mand. “The hous­ing sec­tor has not grown in the last few years. An in­crease in in­ter­est de­duc­tion from 2 lakh to 3 lakh for self­oc­cu­pied houses could be a wel­come change, es­pe­cially be­cause peo­ple have taken higher loans. This may also have a pos­i­tive im­pact on the hous­ing sec­tor as many peo­ple would be in­clined to buy a house for their own liv­ing,” says Vi­neet Agar­wal, Part­ner, Tax, KPMG.

Pro­vi­sions for the af­ford­able hous­ing vi­sion should also be firmed up in this Bud­get, say ex­perts.” In the pre­vi­ous ninemonth Bud­get, the new gov­ern­ment out­lined its vi­sion of boost- ing af­ford­able hous­ing. From the up­com­ing 12-month bud­get, the In­dian real es­tate sec­tor looks for­ward to pro­vi­sions that firm this vi­sion up on the ground,” says. Anuj Puri, chair­man & coun­try head, JLL In­dia:

To make the gov­ern­ment’s vi­sion of Hous­ing for All by 2022 a re­al­ity, apart­ments of or un­der 1000 sq ft. should be ex­empt from in­come tax Act 80I (B). By do­ing so, the ben­e­fits will be di­rectly trans­ferred to the cus­tomers, says RK Arora, chair man, Su­pertech Limited.

“The in­dus­try is also an­tic­i­pat­ing in­creased fo­cus on ur­ban in­fra­struc­ture as well, along with tax­a­tion clar­i­fi­ca­tions for Real Es­tate In­vest­ment Trusts ( REITs) and In­fra­struc­ture In­vest­ment Trusts (In­vITs) to be­gin func­tion­ing in the coun­try,” adds Mag­a­zine.

De­vel­op­ers have been cam­paign­ing for a faster project ap­proval process for good rea­son as this would speed up the sup­ply pipe­line, help bring prices down and also en­sure that real es­tate re­mains vi­able as a busi­ness. The Bud­get should pro­vide suit­able re­lief on this front, while si­mul­ta­ne­ously en­sur­ing that con­struc­tion qual­ity norms are not com­pro­mised in the process and that faster ap­provals do not re­sult in sup­port in­fra­struc­ture fail­ure in new precincts be­ing de­vel­oped. Tax in­cen­tives should be given for rent­ing out res­i­den­tial prop­er­ties. Cur­rently, rental in­come is treated as nor­mal tax­able in­come. Pro­vid­ing tax breaks spe­cific to rental in­come will give a sig­nif­i­cant boost to rental hous­ing seg­ment in the coun­try, and help in­crease rental sup­ply in the met­ros, says Puri.

Ac­cord­ing t o Ge­tam­ber Anand, pres­i­dent (elect), Credai and chair­man and man­ag­ing direc­tor, ATS Group, “Cer­tain sec­tions of the In­come Tax Act like 43CA which im­poses a tax on an as­sumed in­come if there is a dis­par­ity of pur­chase value and the cir­cle rate needs to be scrapped im­me­di­ately be­cause the rev­enue de­part­ments of all state gov­ern­ments across the coun­try have started in­creas­ing the cir­cle rates very un­jus­ti­fi­ably just to in­crease the rev­enue of the stamp duty col­lec­tion. This has ac­tu­ally set back the en­tire in­dus­try be­cause the home­buyer may be buy­ing a flat at 50 lakh at a lo­ca­tion and the cir­cle rate is say 70 lakh, so he has to pay an in­come tax on

20 lakh which is like un­earned in­come that the depart­ment as­sumes.”

A ma­jor de­mand of the real es­tate sec­tor is in­dus­try recog­ni­tion. Of­fi­cial recog­ni­tion will elim­i­nate many of the prob­lems faced by the sec­tor that con­trib­utes ap­prox­i­mately 8% to the GDP, adds Anil Mithas, CMD, Un­nati For­tune Group.

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