Manju YagnikThe count-down to the most awaited Budget for the year has begun and the sector definitely has high expectations for both the common man and the industry. Under the leadership of Narendra Modi, we are positive to have an announcement that will create a revolutionary change. The government has already expressed its vision of housing for all by 2022 and the backup from the Budget will only help in expediting homes to become more affordable while meeting the objectives.
Key Factors
Industry Status: The real estate sector contributes to over 15 percent of India’s GDP. The industry is forced to comply with a stringent evaluation process amongst the other challenges. These processes in turn hamper timelines, cost and customer relationship which is a blow on the industry, too. The expectation is to get the industry status through the Budget.
Income Tax Rate: With the past tax exemption announcement, the taxpayer bucket decreased by four million hence the expectation is for a further reduction. If the tax benefit is doubled, the savings can be then converted into real estate investments. For instance, the current Rs 1.5 lakh can be Rs 3 lakh – a definite catalyst in increasing the purchase decision.
Clarity on GST: 2017 is extremely crucial for the GST. As announced by the Finance Minister July 1, 2017 as the new date, the Budget announcement will then have a good impact on how GST can come alive. The expectation is 12 to 18 percent based on essential and nonessential services.
Hike in the HRA deduction limit for salaried people: HRA for the salaried person can certainly look at a deduction for this Budget. However, as the non-HRA self-employed people under Section 80GG can only claim a max deduction of Rs 2000 per month, the Budget will then have to address it anomaly. The end consumer – common man -- creates an impact on the real estate sector.
Complete clarity for a 'less cash' nation : In the last 30 days, the nation has been managing limited cash; hence, a complete clarity for a digital less cash nation will definitely be an impact on the ways purchases and interest in the sector will look like.
Any sector can’t work on a standalone system; hence, factors that impact the real estate industry directly or indirectly will be on a watch this Budget. Overall, the expectation is to have a pro-people Budget. (Author is Manju Yagnik, Vice Chairperson, Nahar Group)
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