NEW DELHI (INDIA): Knight Frank India Chairman & Managing Director Shishir Baijal said that this has been one of the path breaking budgets with far reaching changes especially for the real estate sector. It is positive that the real estate sector has come in the central spectrum of the Union Budget.
“This has come at a time when the beleaguered sector has been looking at measures to boost the sentiments. The real estate sector which was the hardest hit by demonetisation move will be one of the major beneficiaries of this budget. Prudence in fiscal discipline is welcome and will encourage RBI to look at a lower interest rate regime that will provide the much needed fillip to this stressed sector,” he said.
“Increased focus on infrastructure especially construction of new roads, improvement of existing roads and coastal connectivity will go a long way to benefit the real estate sector,” added Baijal.
“Increase in allocation of funds under PMAY (Pradhan Mantri Awas Yojana) shows the focus of government towards making Housing For All a reality by 2020. Providing infrastructure status to Affordable Housing, a long standing demand of the real estate industry will not only bring the cost of financing down but will also open up additional avenues for developers to raise funds. We believe that the shift in eligibility criteria for Affordable Housing from built up area to carpet area will increase the unit size by 20-30% and will offer home buyers the benefit of owning larger units. This will also encourage leading real estate players to enter the Affordable Housing segment,” he added.
“The move to reduce the tenure of the Long Term Capital Gain tax from 3 years to 2 years is extremely welcome and will help the marketability of real estate as an asset class,” he said.
“Changes in the taxation aspect of JDA (Joint Development Agreement) will greatly encourage more land owners to partner with developers that will benefit the real estate developers and in turn likely to benefit the end consumers,” said Baijal.
Affordable Housing will be given Infrastructure Status
The Union Minister for Finance and Corporate Affairs, Arun Jaitley while presenting the General Budget 2017-18 in Parliament said that affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits.
The National Housing Bank (NHB) will refinance individual housing loans of about Rs. 20,000 crore in 2017-18. Thanks to the surplus liquidity created by demonetisation, the Banks have already started reducing their lending rates, including those for housing. The Finance Minister Shri Jaitley in his Budget Speech said that in addition, interest subvention for housing loans has also been announced by the Prime Minister Narendra Modi.
GST Council has finalised its recommendations on almost all the issues based on consensus
The Union Minister for Finance and Corporate Affairs,Jaitley said that the GST Council has finalised its recommendations on almost all the issues based on consensus after spirited debate and discussions.
The Finance Minister said that the Government on its part has promptly given effect to various provisions of the Constitutional Amendment Act, including constitution of the GST Council.
The GST Council held 9 meetings to discuss various issues relating to GST, including broad contours of the GST rate structure, threshold exemption and parameters for composition scheme, details for compensation to States due to implementation of GST, examination of draft model GST law, draft IGST law and the Compensation Law and administrative mechanism for GST.
He said the preparation of IT system for GST is also on schedule.
The Finance Minister Jaitley in his Budget Speech further said that the extensive reach-out efforts to trade and industry for GST will start from 1st April, 2017 to make them aware of the new taxation system.
He said that since the enactment of the Constitution (One Hundred and First Amendment) Act, 2016, there has been substantial progress on preparatory work towards ushering in GST which is by far the biggest tax reform since Independence.
“Several teams of officers both from the States and Central Board of Excise and Customs (CBEC)have been working to give finishing touch to the Model GST law, rules and other details, he added.
Jaitley said that the Government, through the Central Board of Excise & Customs (CBEC) shall continue to strive to achieve the goal of implementation of GST as per schedule without compromising the spirit of co-operative federalism.
He added that the implementation of GST is likely to bring more taxes both to Central and State Governments because of widening of tax net.
The Finance Minister Jaitley stated that not many changes have been proposed in current regime of Excise & Service Tax in the Budget proposals since they are to be replaced by GST soon.