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Union budget 2017 and the Key pointers for Real Estate Sector
The curtains are raised and we have now a big picture of the Indian Economy right in
front of us with the rolling of Union Budget 2017.All eyes were set on the Union
Budget 2017, post the move of demonetisation by the Central Government of India.
The Union Budget 2017 was the most sought after one for either;
A) it could have made up for the loss , if any, demonetisation caused to the
Indian economy or
B) it would have added up to the accountability and transparency which
demonetisation objectified.
Indian economy has had its transformation since quite a few years. And more
particularly the Indian Real Estate Sector which forms approximately 15 % of the
India’s Gross Domestic Product(GDP);directly and indirectly.With the several reforms
and introduction of the regulatory Acts like Real Estate Act, Benami Transactions ,
GST(Goods and Services Tax) and taxation benefits on housing etc.the Central
Government has been making enough efforts to help shelter everyone.
Let us now take a look at what lies in the store for this fastest driving sector of Indian
Economy given the Union budget 2017.
The Affordable Housing Sector finally gets its Infrastructure status.This in
itself will give a boost to borrowing.
A) Larger affordable housing- The flat which had a built-up area of 30 Sq. Mts.
in the metro cities of Delhi, Mumbai, Chennai, Kolkata and built-up of 60 sq.
mts in other cities were considered under the definition of “Affordable
Housing”. This flat had to be within the 25 km of the metro city.
The new definition of the “ Affordable Housing” replaces the “ Built Up area”
with the “ Carpet area”. The cap remaining the same 30 Sq.mts and 60 Sq
mts for metro cities and others respectively.. This ,clearly,points to the larger
but affordable flats for the common man and also indicates a gush of projects
to meet the ever increasing demand.
B) Reduced Holding Period of Land / housing: – For long-term Capital gain ,
the holding period has come down from 3 years to 2 years. Thus, giving a thrust
to the investment in properties as it is presently in stocks and shares. This also
means lower tax liability for the investors, thus boosting the sector.
C) Joint Development Agreement (JDA) & taxation on Capital gains: – The
landowner who is undergoing a JDA for developing a property would be subject
to capital Gains tax only after the completion of the project as against the current
practice.
D)Time period for calculation of notional Rent on Unsold Properties of a
developer:- FM has changed the time period to calculate the notional rent which
the Housing developer incurs on a unsold property and is now set to kick in after
1 year of completion of the project. This is a breather to the developers who have
witnessed the slow down in the sales due to demonetisation and thus to increase
the suppressed demand.
Budget 2017-18 , indeed, offers a new lifeline to the slumped down Sector of
Real Estate and has given new wings for the housing dreams of the people.

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