This year's budget has been announced on an optimistic note, giving a boost to the middle-class sector and the farming population of the nation. With the Finance Minister announcing tax exemption for income up to Rs. 5 lakhs and an increase in standard deduction from Rs. 50,000 to Rs. 40,000, there is a definite reason for middle-class taxpayers to rejoice.
India, one of the fastest growing economies today, has laid the foundation for sustainable growth in the real estate sector. During 2014-18, under PM Awas Yojana, over 1.53 lakh houses have been constructed. With the establishment of RERA, 2016 realty law, the real estate landscape witnessed industry-wide transparency, fortifying investor sentiment while boosting realty sales. The decision to action income tax relief on notional rent on second homes will encourage consumer consumption, while the increase in deduction scheme threshold for rent from Rs 1.8 lakh to 2.4 lakh will encourage investments. Notional tax exemption, extended to two years, will also help developers clear off unsold inventory. Further, the government's proposal of rolling over capital gains to two properties instead of one will generate investment opportunities in the real estate segment.
The government has set the stage for growth and development with path-breaking, comprehensive structural reforms such as GST (Goods & Services Tax). With the implementation of GST, the biggest taxation reform since Independence, a bevy of taxes have been brought under a single regime, says the Finance Minister, Mr. Piyush Goyal. The GST council has also announced that they will be taking steps to reduce tax for homebuyers. The council will suggest ways and devise a proposal to bring down the tax burden on house buyers, ensuring a positive shift in the real estate landscape. We, developers, yearn that GST rates for properties under construction be lowered or exempted, as it will not only benefit consumers and developers but also assist the overall sector to thrive.
Together, these direct and indirect incentives will bring about positive changes in the real estate landscape in 2019.