NEW DELHI (INDIA): Sai Estate Consultants MD Amit Wadhwani said that the finance minister in my view has missed catering to the wants and needs of the middle class tax payers who actually were worst impacted during the recent demotisation.
The Union Minister for Finance and Corporate Affairs, Arun Jaitley presented the General Budget 2017-18 in Parliament here today. This is the first of its kind which included the Railway Budget. This year’s Union Budget also does not have Plan and Non-plan classifications and has been advanced by a month to the beginning of February.
No relief in service tax, VAT was a dampner for this class. The onus of filing TDS still remains on the end users for every property transaction which should have been the builder’s responsibility as many ignorant consumers miss deducting TDS and end up paying penalties. Was also hoping to see some positive use for metro city development, where as the focus has been only on affordable housing which is truely unaffordable in the top 4 cities across the nation. Additonal surcharge of 10 % for income between 50 lakhs to 99 lakhs will also hit upper middle class tax payers who will resort to tax evasion methods to avoid paying additional 10 %,” said Wadhwani.
“The real estate and infrastructure sector has seen constructive steps across the budget to reduce costs for developers and attract more investors . The allocation of Rs 3,96,135 crore for infrastructure will indeed give real estate the much needed impetus to re-monetise the sector in the current situation. This will specifically allow access to capital and bank debt, while improving liquidity situation in the sector,” he added.
“The tax relief for projects with apartment of a carpet area of upto 30 sq mtrs in municipal limits of 4 metros and upto 60 sq metres for apartments located outside municipal limits of metros clearly defines size with no ambiguity. Net net, affordable housing now given the status of infrastructure will increase certainty in buying behavior. Empowering PSU banks is also a move in the right direction as interest subvention in home loans will trigger higher subscription to cheaper loans in turn lead to better real estate absorption. Also, the change in the tenure of capital gains from 3 years to 2 years is a positive move over all for the industry,” said Wadhwani.
“Re-sellers will now have to mandatorily deploy the funds from the sale of property into another within a span of 2 years. Ready possession units will get an impetus and the available unsold stock across the nation with get absorbed faster. On the other side, developers will see the incentives in terms of pricing and organized payment if they are able to offer more ready stock versus aiming to sell during a ‘pre-launch’ stage which passes huge risk onto the consumers,”
Budget 2017 is a win-win for homebuyers, investors, banks and real estate players. The new status will augment resource allocation for the sector, which in turn will improve housing supply and reduce huge demand backlog. The government would need to re-define affordable housing or low-cost housing clearly and ensure that funds from these projects are not withdrawn before its completion,” added Wadhwani.