Budget 2021-22 WISH LIST

Key challenges

Given the market / pandemic situation, there is an overall fall in the fair market values of properties. The reckoner values (circle rates) have pretty much remained at the pre-covid levels. Such a situation leads to tax being calculated on deemed income basis.

Pre-sales have reduced significantly due to lack of customer confidence on delays in project completion. This has created liquidity issues with residential developers.

Industry ask

Real estate transactions (immovable property or shares of property companies) between nonrelated parties to be exempt from deemed income provisions [such as 56(2)(x) and 43CA]. The fall in market value due to the pandemic is much more than the safe harbour currently provided under these provisions.

Reduction in stamp duties in some states led to significant increase in demand.

To enhance the demand further across the country, a long-term capital gains exemption could be provided on all under construction properties purchased during FY 2021 / 22. With reduced stamp duties and no capital gains, it would be a great incentive for property buyers and would also boost the GST collection.

In view of the enhanced focus on the digital economy, there will be a need for high quality data centres. Tax incentives for developers undertaking data centre projects would help in providing the initial boost to this niche asset class.