The real estate sector in India is one of the highest contributing sectors and has achieved remarkable recovery post-pandemic. The Union Budget is expected to provide a boost to sustain the momentum in 2023. The industry and stakeholders at large will be looking at the steps taken by the Government to facilitate overall growth. Some key expectations would include:
- Increasing HRA % for metro cities: The government should consider increasing the percentage of House Rent Allowance (HRA) that employees can claim as tax deductions for those living in metro cities. This will help to offset the higher cost of living in these areas and make it more affordable for people to rent a home.
- Increasing max loss cap for income under house property: The government should consider increasing the maximum loss that can be claimed as a deduction for income under house property. This will provide more financial relief for individuals who own multiple properties and are facing losses due to factors such as vacancy or rental income being less than the mortgage interest payments.
- Creating a separate section for housing loan principal repayment deduction: The government should consider creating a separate section for housing loan principal repayment deduction in the Income Tax Act. This will help to make it easier for taxpayers to claim this deduction and will also provide an additional incentive for people to invest in property.
- Reducing tax rates for LLP: The government should consider reducing the tax rates for Limited Liability Partnerships (LLPs), especially in the real estate sector. This will make it more attractive for developers and investors to form LLPs and will also help to attract more foreign investment into the sector.
- Lack of transparency and standardisation in property transactions: The Indian real estate market has been plagued by lack of transparency and standardisation in property transactions, resulting in confusion and mistrust among buyers and sellers. The budget could introduce measures to improve transparency and standardisation, such as mandatory registration of all property transactions and strict penalties for non-compliance.
- Limited access to finance for developers and buyers: The budget could introduce measures to improve access to finance, such as providing tax incentives for lending institutions that fund real estate projects and reducing interest rates on home loans.
- Slow pace of construction and project completion: The construction and completion of real estate projects in India is often delayed due to a variety of reasons, such as lack of regulatory compliance, delays in obtaining approvals, and shortage of skilled labour, The budget could introduce measures to speed up construction and project completion, such as streamlining the regulatory approval process and providing training and incentives for skilled labour.
- Poor infrastructure: Poor infrastructure is one of the major challenges faced by the commercial real estate industry. The budget could introduce measures to improve infrastructure, such as providing funding for the development of transportation networks, water and power supply systems, and other essential facilities.
Corporate Comm India (CCI Newswire)