Budget Expectations 2022: Real estate sector expecting relaxation in taxes

“The real estate sector is looking at a few tax relaxations such as a hike in ₹2 lakh rebate under section 24, as in the aftermath of the pandemic, the profit margins are already low and developers have to compensate for the lost time. A single window clearance mechanism has remained a demand for many years now. In addition to this, it is an opportune moment to award industry status to the real estate sector so that it can avail cheaper credit facilities from financial institutions,” says Dr Atul Goel, MD, Goel Ganga Group & President (Elect.), NAREDCO Pune

In addition to this, a GST waiver for under-construction properties, and incentives for private investment in the affordable housing sector will be enabling. Easing of liquidity and short term tax holidays might go a long way in boosting the overall recovery of the realty sector, he added

Nakul Mathur, MD, Avanta India says, “In the new budget, we would request the finance minister to reduce the TDS deduction rates on coworking spaces as most of the receivables from the client is towards services. It would be best if the finance minister considers bringing coworking spaces into a 2% TDS slab as in the case of services from the present 10%. This will immensely help the coworking spaces in the management of their cashflows.”

Real estate is one of the key pillars of the Indian economy contributing around ~ 8% to the overall GDP. “The government must acknowledge the important role played by the sector and make deep policy reforms to accelerate growth in realty demand. Currently, concession can be availed in income tax on up to 2 lakhs paid as interest on home loans. This should be revised and increased to build healthy demand in the sector. Likewise, waivers or reductions should be offered on GSTs on raw materials such as cement, steel, etc. Raw material prices are increasing and reduction in GST rates can give a lot of relief to the developer fraternity. Giving infrastructure status to the sector is also long due as it can help in building liquidity in the sector,” says Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management.

Earlier on November 29, the government told the Rajya Sabha that as many as 114.06 lakh houses have been sanctioned, 89.36 lakh grounded (or foundation stone laid) and 52.55 lakh completed or delivered under the Pradhan Mantri Awas Yojana-Urban (PMAY-U).