Advantages for property owners declared in Budget 2019

The real estate sector is one of the important sectors in India. It has been developing ata fast rate in the last few years. There is both growth and flux and the trend seems to remain the same in 2019. Due to the introduction of several reforms, the real estate sector is experiencing changes in regulatory, tax and business environment. The next general election mood is around the corner. It would be interesting if the present government continues all its reforms plans. If the new government takes in charge, there are chances for the real estate to experience the next level.

In the last 2 years, India has somehow jumped to 52 positions on the ranking list-Ease of Doing Business that was published by World Bank. It is mostly due to the improvement in the six categories mentioned.

Increased accountability and transparency has helped to gain a lot of attention among institutional investors. They are presently assessing the real estate sector with fresh dynamism. It is also expected that the REIT (real estate investment trust) would be in shape any time or as early as possible. It was expected to enhance cash flows into real estate sector.

The property owners can enjoy certain benefits due to the proposal of Budget 2019. The government has planned to increase the TDS exception limit applicable to compensation of rental from ₹1,80,000 – 2,40,0000 per year. According to the present tax rules, the tenant that includes salaried individuals is requested to withhold TDS on paying of rent higher than ₹ 1, 80,000 in a year. After the new rules have become effective, the TDS will be applicable if the annual rental amount is more than ₹ 2,40,000.

The government has made changes to enhance the real estate sector. It has planned to increase the exemption period from excise on unsold inventories and on imaginary rent from 1 year to 2 years. This rule will be applicable at the end of this year or when the project gets completed.

Housing for all scheme

The government has planned to encompass the privileges of Section 80(i)BA of Income Tax Act for about one year. It means the housing and real estate projects which has been registered by the RERA or real estate regulatory act by March 31, 2020, will be taken under its domain. As per the affordable housing scheme by the government, the projects that have units of carpet area of about 30 square metres in metro towns under certain circumstances gain from one hundred percent tax deduction.

The future and fate of the real estate sector in India will be mostly according to the general elections that are proposed by the end of this year. The first half of 2019 is said to be slow and the developers are slowly launching and they are waiting for polls. The home buyers are following the wait and watch method. It is also said that the first three months of 2019 have remained as a good time especially for home buyers. It is because they can purchase at a hard bargain.

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