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CA Ramesh Agrawal
The Hon’ble Prime Minister MODI has always put his focus on “Housing for All’. Now the Finance Minister Mrs. Nirmala Sitharaman made it clear in her Budget 2021-22 that the affordable housing is topmost priority of Modi Government.
In the Union Budget 2021, Ministry
of Housing and Urban Affairs has been allocated more than Rs 54,000 Crore for
Urban Centers all over India.
Impact of Union Budget 2021
on Real Estate
are as under: -
Safe Harbor Limit
Increased for Primary Sale of Residential Units: -
To incentivize home buyers and real
estate developers, it has been proposed to increase safe harbor limit from 10%
to 20% for the specified primary sale of residential units.
Affordable Housing:
In 2019 July Budget, the government
provided an additional interest deduction, amounting to Rs 1.5 lakh for the loan taken to purchase an affordable
house. The Finance Minister has given extension the eligibility of this
deduction for 1 more year to 31st March 2022. The government will provide
additional deduction of interest, amounting to Rs 1.5 lakh for loan taken up till
31st March 2022 to purchase an affordable house.
The Finance Minister has offered to
allow tax exemption for notified Affordable Rental Housing Projects to increase
the supply for migrant workers.
REITs: -
Enabling of Foreign Portfolio
Investors in Debt Financing of InVITs and REITs by amending relevant legislations. This
will help in finance to InVITs and REITs, augmenting funds for infrastructure
and real estate sectors.
In the previous Budget, the government
had abolished the Dividend Distribution Tax (DDT) to incentivize investment. Now,
the Dividend has been made Taxable in the hands of shareholders. To do the ease
of compliance, the Finance Minister has proposed to make dividend payment to
REIT/ InvIT exempt from TDS.
Further, the Finance Minister has
relaxed the Advance Tax Liability on dividend by saying that advance tax
liability on dividend income will arise only after the declaration / payment of
Dividend. Finance Minister proposed to enable deduction of tax on dividend for
Foreign Portfolio Investors at lower treaty rate.
Infrastructure: -
The government will work on raising
the public transport in urban area through expansion of Metro rail. 702 KM of conventional metro is currently operational
and another 1,016 KM of metro and RRTS is under construction in 27
cities.
Two new technologies ‘MetroLite’ and
‘MetroNeo’ will be deployed to provide metro rail systems at much lesser cost
with same convenience, experience and safety in the cities.
Central funding will be provided to:
-
Ø Rs 63,246 Crore for Chennai Metro Railway Phase-II of
118.9 KM.
Ø
Rs
1,957.05 Crore for Kochi Metro Railway Phase-II of 11.5 KM.
Ø
Rs 14,788
Crore for Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 KM.
Ø
Rs 5,976
Crore for Nagpur Metro Rail Project Phase-II
Ø Rs 2,092 Crore for Nashik Metro.
Finance
Minister Smt. Nirmala Sitharaman said that Infrastructure requires long term
debt financing. For better infrastructure financing, a professionally
managed Development Financial Institution (DFI) is essentially
required to act for it.
A Bill to set up a DFI was introduced
by FM Minister. A sum of Rs 20,000 Crore has been provided by FM Minister to capitalize
this institution.
Stressed Asset Resolution:
-
Two types of companies i.e., Asset
Reconstruction Company and Asset Management Company will be set up to
consolidate and take over the existing stressed debt and then managing and
disposing of the assets to Alternate Investment Funds and other potential
investors for eventual value realization.
NCLT Framework will be strengthened
to ensure faster resolution of cases, E-Courts system will be implemented along
with alternate methods for debt resolution and introduction of special
framework for MSMEs.
LED Lights: -
Custom Duty has been increased from
7.5% to 10% on inputs and parts of LED Lights or fixtures including LED Lamps and
from 5% to 15% on solar lanterns or solar lamps.
Construction Workers:
-
To formulate Health, Housing, Skill,
Insurance, Credit, and food schemes for migrant workers, the Finance Minister proposed
to launch a portal which will collect relevant information gig, building, and
construction-workers, among others. This is an extremely helpful initiative for
the migrant workers.
Very useful. Thanks sir
ReplyDeleteReal estate is one of the most lucrative sectors of our country.
ReplyDeleteThe government has unequivocally stated that the excess land holdings of PSUs would be rationalized. So, quality land parcels would come up for development.
With a liberal tax regime for the REITs and reduction in TAX terrorism, international funds would flow into this sector, which is the second largest employer after agriculture. We desperately need that to happen as COVID 19 rendered around 180 million people job less.