Budget 2024: Coworking sector anticipates tax reforms, single-window clearance

The Union Budget for the financial year 2024-25 will be presented in the Lok Sabha on July 23

As the Union Budget draws near, real estate experts believe that the government should prioritize the coworking industry that will drive innovation and entrepreneurship across the nation by among other things mitigating the cost that startups, for example, would face were they to set up their own offices.

Experts add that the upcoming Budget can consider lowering the goods and services tax (GST) rate for small-scale coworking clients, which will incentivise startups, expand the industry's reach and ultimately benefit government revenue. Additionally, the need for a one-window clearance system will expedite the establishment of new coworking spaces in non-metropolitan areas, allowing operators to grow effectively.

"We see a major opportunity in integrating coworking spaces with SEZs (special economic zones). This would create a win-win scenario, combining the coworking sector's agility and focus on innovation with the SEZs' beneficial regulations for businesses. This powerful mix could attract domestic and international companies, fuelling economic growth and fostering dynamic business hubs in tier II cities," said Sumit Lakhani, deputy CEO of Awfis Space Solutions.

With high stamp and registration duties, experts believe that a concession or allowing twice the duty paid as expenditure under income tax will encourage even the smaller deals to get registered. Experts feel that a concession, such as permitting twice the duty paid as an expense under income tax, may encourage even smaller agreements to get registered.

"An important requirement for the coworking industry has been a lower/concessional rate of TDS (tax deducted at source) that will improve the working capital. Another measure that could be announced to intensify the growth of the coworking sector is a further and continued extension of tax holidays for startups as they would be motivated to scale up their business and enhance investment," , 315Work Avenue founder Manas Mehrotra said.