A Welcome Budget for the Real Estate Sector According to Surendra Hiranandani, Founder & Director, House of Hiranandani
It is an inclusive budget that focused on strengthening the agricultural and rural economy, healthcare, infrastructure, social inclusion, digital and employment generation in the country. It also gave a substantial boost to the residential housing sector.
The rise in individual tax exemption up to Rs 5 lakh will impact consumer sentiments positively. The tax savings that the salaried class stand to benefit will lead to higher consumption including investments into residential real estate. The proposal to raise the limit TDS threshold to Rs 40,000 currently will also provide relief to taxpayers who invest in bank deposits and various post office schemes. Amongst the notable announcements for the real estate sector, the decision to eliminate tax on notional rent on second self-occupied house is a welcome move. This will prep up demand for second homes substantially.
Relaxation of notional rent on unsold inventory to 2 years will also ease burden on developers, who now have more time to sell their projects. Continued thrust on affordable housing through tax benefits on projects allows for expansion of this class of the asset even further. The benefit of exemption of capital gains up to Rs 2 crore for investment in two houses will increase sales in the residential sector. The FM has brought about substantial improvements in both personal income and capital gains. This is extremely positive as compared to the slow incremental reforms of the past.
The decision to grant significant capital for rural development and infrastructure is a step in the right direction. The impressive development of roads, infrastructure over the last five years has been significant and if the same momentum is continued then the increased connectivity will have a positive rub off on all segments of real estate including commercial and industrial developments. To sum it up we definitely believe that this budget has set the tone for future growth of the economy.
For more updates on the architecture and interiors industry visit: www.fortunestreets.com