“The expectation of real estate contributing 13-14% to the nation’s GDP by 2025 can materialize if the requisite support to this sector is extended starting this budget. Incentivising customers for purchase of real estate with a 50% reversal of paid GST could go a long way in helping boost demand alongside the much-anticipated change in tax slabs. A slight change in the second-highest tax slab of 20% could impact as much as 27% or 1.47 crore of individual taxpayers.”
Expectations from Union Budget 2020:
- Industry status for the Real Estate sector as a whole, currently the same has been accorded only to affordable housing. This is a long-pending demand and can help developers raise funds at lower costs.
- The government needs to push the well-capitalized NBFC’s to extend liquidity to the sector and look at a resolution mechanism for the stressed NBFC’s and banks to enable seamless credit flow for developers and homebuyers.
- The additional tax benefit for home loan interest announced in the previous budget now takes the tally to 3.5 lacs (Section 24 (b) & 80 EEA) for homes worth 45 lacs circle value. The same needs to be extended for homes costing upto Rs.1 crore to benefit the middle-class families residing in Metro cities.
- The additional income tax benefit for home loan interest which was announced for home loans sanctioned between Apr 19 – Mar 20 needs to be extended for a minimum of 3 more years.
- The period of exemption from levy of tax on notional rent, on unsold inventories, needs to be extended to 3 years from 2 after receiving the Occupation Certificate. This is keeping in mind the slow reduction in unsold inventory levels and lackluster demand for real estate assets.
- The tax rebate on the development of affordable housing needs to be extended further to incentivize the development of affordable housing projects.
- Extending no tax upto an income of Rs.5 lacs to all taxpayers.
- Change in the second-highest tax slab of 20% could impact as much as 27% or 1.47 crore of individual taxpayers. This will leave more money in the hands of the taxpayers and increase their home loan EMI appetite.
- Incentivising customers for purchase of real estate with a 50% reversal of paid GST could go a long way in helping boost demand alongside the much-anticipated change in tax slabs.
- Increasing the standard deduction to Rs.75000 for salaried professionals will benefit not less than 2.3 crore salaried taxpayers.