Union Finance Minister recently presented sixth and final interim Budget of BJP’s government before the election in parliament on February 1, 2019. He highlighted the government’s vision for 2030. Along with that, he announced the farmer income support scheme of Rs 6,000 annually and several other plans. The real estate sector took it as a balanced budget. However, a few feel that there is no major tax relief for the real middle-class.
Read here how the leaders of corporate and real estate sectors reacted to Interim Budget 2019:
Dr Niranjan Hiranandani
Senior Vice President, Asscoham
"It is a directional budget with a clear intent of doing good to all the sections of the economy and the society, be it farmers, the industry and the common man. It’s encouraging to note the Government's 10-point dynamic vision to build India of future. Initiatives to diffuse farmers' distress, labour reforms, boost to SMEs and MSMEs, push to 'Housing for All' by giving extension by another year under section 80 IBA, boost to the infrastructure sector and relaxations to individuals through tax reliefs will empower each element of the economy. Liquidity is an issue in the economy and in the real estate sector too. We expect the Government to address the concern to make all these reforms effective to ensure ease-of-doing the business and ease-of-living."
CEO, HomeKraft, an affordable and mid-income housing company by ATS Group
This budget has given the right push to the affordable housing sector and the growth witnessed in the last year would continue unabated. As families continue to expand, exemption of tax on notional rent for second self-occupied house will further push affordable and mid-income housing in the country. We will now see more new launches by well established and fundamentally strong developers in the affordable segment to reap in the benefits of Section 80-IBA as well.
Mr Sushil Kanugolu
MD and CEO, Fipola
We welcome the Government's proposal to create a separate department for the Fisheries. Also, the move to provide 2% interest subvention to farmers pursuing animal husbandry and fisheries will boost skill development, provide employment opportunities and aid growth of farmers in this sector. We are proud to be part of 2nd largest startup hub ecosystem in the world and the government's aim to push the use of Artificial Intelligence in the startup ecosystem coupled with Centre of Excellence and National Program for AI is going to be a game changer for the startup community. The budget has provided the impetus for job creation, envision rapid growth in the retail sector and step foot into a digital world with plethora of possibilities for the youth of tomorrow.
Mr Shishir Baijal
Chairman & Managing Director, Knight Frank
For the demand side, the budget has ensured better liquidity and lower tax burdens on the purchase of homes. The benefit of rollover of capital gains has been increased from one house to two houses, upto INR 2 Crores (once in lifetime), is a tremendous step by the government. For the supply side, the government has taken into consideration the challenge of unsold inventory and has therefore increased the period of exemption for notional tax on unoccupied units from the prevalent 1 year to 2 years. This will give developers a big relief allowing them to concentrate on sales strategies.
MS Sarojini Ahuja
Vice President - Sales & Marketing, Transcon Triumph
People owning second homes and were paying tax on the notional rent would also be exempted from paying taxes now. We were looking forward to some reforms in terms of capital pumping into the real estate sector through the banking system. Also the housing industry was looking forward towards much-needed relief in GST and revision in home loan rates.
Mr Pradeep Misra
CMD, Rudrabhishek Enterprises Limited
The interim budget was largely on expected lines. Immediate interest of multiple segments has been kept in consideration. It is good to see that the overall fiscal deficit has been targeted at 3.5% of GDP. If achieved successfully we will see the positive impact on growth and also on inflation. The relief given to taxpayers in terms of increased slab of tax- rebate to Rs. 5 lakh, and increased standard deduction, will surely result in saving surplus and investible funds at the individual level. Further, for the house owners, the benefit of rollover of capital tax gains for investment in one residential house to that in two residential house will attract the retail investment in real estate sector.
Mr Nakul Himatsingka
Managing Director, Ideal Group
The optimistic vibes of this Interim Budget will undoubtedly manifest itself positively with time. The rebates for Individual Tax Payers, increase in the Standard Deduction & TDS threshold from Rental Income, the benefit of roll over of Capital Tax gains, exemption of tax on 2nd self-occupied home, will play significant roles in positively influencing buyer sentiment. We hope this results in an increase in our Sales figures and nudges fence sitters.
Mr Sachchidanand Rai
Chairman Eden Realty Group
Proposal for appointment of a Group of Ministers to reduce GST burden on home buyers, removal of tax on notional rent for second home, extension of period to 2 years on tax exemption on notional rent for unsold stock, etc are all welcome steps. The revision of income tax slab is also expected to leave more money in the pockets of home buyers.
Mr Rishi Jain
Managing Director, Jain Group
It is a well-balanced and very mature budget. I half expected more loan waivers and cross-subsidization, but interest subvention is a much prudent measure, clearly, there is great maturity evident in these proposals. The easing of the notional rent was a big relief, this spectre has been haunting developers for some time now. The Capital gain relaxation, the TDS relaxation are all measures to remove government hindrances in transacting property.
Mr Abhishek Bhardwaj
CMO, Shristi Infrastructure Development Corporation Ltd
The real estate sector welcomes the Government’s decision to have moved the GST Council to appoint a group of Ministers to examine and make recommendations in reducing the burden of GST on home buyers. This will definitely boost the confidence among the home buyers. Also, the decision to extend the benefits to the housing projects (approved till 31st March 2020) for one more year, to make more homes available under affordable housing would certainly give great impetus to the realty sector.
Mr Anil Chaudhry
Zone President and Managing Director, Schneider Electric India
The budget announcement that India will drive on electric vehicles with renewables, backed by energy storage devices, becoming a major source of power supply shows that this is expected to be a key focus area for future governments. The long term focus on creating a fully digital economy with one lakh digital villages in next five years and expanding rural industrialisation by harnessing digital technologies is also laudable. This is combined with a reiteration of Make in India which can support the evolution to the smarter, Industry 4.0 A combination of all these measures, when undertaken, will put India firmly on road to become a $10 trillion economy in next eight years.
Mr Gaurav Gupta
Director, Omkar Realtors:
The interim budget presented today will go down in the history as a relief budget with benefits in terms of income & exemptions. To boost housing the rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees which will ensure investment in real estate. However, under construction home buyers who were expecting GST rationalisation has been kept open-ended for now. Hope the slab will come down to 5 or 6 percent soon.
Mr Sanjay Dutt
MD & CEO, Tata Realty Limited
The Interim Budget 2019 has remained focused on the nation’s economic growth and brings a positive sentiment in the real-estate industry.
The government’s initiative to reduce the GST burden on the taxpayer coupled with tax rebates on incomes up to INR 5 lakh will help improve the purchasing power of individuals.
With no notional rent levied on second self-occupied homes and the capital gains up to Rs. 2 crores which can be used for buying upto 2 houses, provide much needed impetus to the demand for homes. The deductions announced under Section 80IBA have been extended to projects which will be registered by March 2020-this again paves the way for new launches.
Mr Shrinivas Rao
Proposed reforms such as exemptions on income tax and direct financial benefits along with the PM Kisan Nidhi Yojana come as a relief for the middle-class and farmers respectively. Although the proposition does seem like a roadmap for rural and urban economic development, the upcoming July budget will bring further clarity.
Mr Rajat Rastogi
Executive Director, Runwal Group
The budget is a positive one. Income tax exemption limit change, farm initiatives and other measures will ensure all segments of the economy including farmers, middle class, rural and urban get something. Changes done in capital gains tax limits, two-year rollover benefits, removal of notional income on second home and increasing the benefits to two residential houses will hopefully give some impetus to the realty market.
Mr Ashish R. Puravankara
Managing Director of Puravankara Ltd.
This budget of course augurs positively for the Affordable Housing segment and will go a long way in addressing the housing issues of the nation. Provident Housing, which is Puravankara’s premium affordable housing arm, is extremely happy to see this move in the right direction. Government’s assurance that the GST Council is seeking a recommendation from GoM’s on the GST applicable on purchase of homes is also heartening.
Mr Mayur Shah
Managing Director, Marathon Group
The measures announced by the government for encouraging purchase and availing tax benefits while buying a second home is a positive step to minimize the risks associated with high levels of unsold residential inventory. We expect that measures such as no tax on rental income of up to Rs 2.4 lakh on the second house, capital gain benefit under Sec 54EC doubled to Rs 2 crore and allowing it to be deployed in two houses, will give fillip to demand in the residential realty segment. Also, the income tax exemptions to the middle class will boost home sales and support demand growth.
Mr Viabhav Agrawal
VP- Head of Research and ARQ, Angel Broking
The budget has given a significant boost by putting more money in the hands of the middle class tax payers. TDS exemption limit on bank and post office deposits have been increased from Rs10,000 to Rs 40,000 per year thereby easing tax administration for small savers. But the biggest change is on the proposed changes in tax administration over the next 2 years wherein all tax returns will be processed in 24 hours and the refunds will be processed simultaneously. It is definitely a significant budget from the income tax perspective.
Managing Director at Sowparnika Projects and Infrastructure Pvt. Ltd.
The interim budget of 2019 will definitely benefit both the affordable housing sector as well as homebuyers. The Government announced policies that would directly and indirectly impact the homebuyers, including a complete tax rebate for those earning upto Rs 5 lakh, an increase in disposable income and an exemption of notional rent on the second self occupied home.
Mr Ramesh Sanghvi
CMD of Sanghvi Parrsssva group of companies
The interim budget proves to be positive for the affordable real estate market. The benefits under Section 80-IBA of the Income Tax Act is being extended for one more year to the housing projects approved till 31st March 2020 for making more homes available under affordable housing. This will be a major relief for both the buyers and developers like us. However, we are waiting for the decision of the GST committee.
Mr Punit Agarwal
C.E.O, Nirvana Realty
The interim budget is a boon to the Indian middle-class segment. The initiatives mentioned in this budget is very encouraging for the affordable housing market. Now more and more developers will show interest in the affordable housing segment, in turn, benefitting the buyers. We are hoping for the GST committee to come up with a GST rate that would be beneficial for buyers which will help the real estate sector to boost.
Chairman ANAROCK Property Consultants
The interim budget was more or less a vote bank-facing exercise - an electoral pitch that drew attention to past achievements. It will give a boost to Affordable homes. The rollover of capital gains tax is a good move to incentivize genuine homebuyers. Electricity for all by 2019 could have positive implications. Infrastructure was given a major push by increasing spending in airports, railways etc. There will now be no tax on house rents up to Rs. 2.4 lakh from the previous limit of Rs. 1.8 lakh. The downsides are there was no major tax relief to the ‘real’ middle-class. No announcements were made with regards to clearing the NBFC deadlock which continues to hold the real estate sector to ransom.
Mr Amit Haware,
CEO and joint MD Haware Properties
The interim budget has provided relief to affordable house developers. The announcement made by the ministry of finance about the GST rate reduction proposal has encouraged buyers to invest in the real estate sector helping in strengthen the market.
Mr Boman R. Irani
Chairman & Managing Director, Rustomjee Group
With RERA and Benami Transaction Act, bringing in tremendous transparency in the sector, there has been a surge in housing demand from the NRI community. The government’s proposal to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years is a good rational move. The lowering of GST on properties is a positive move provided that ITC is continued thereby allowing a real reduction in prices to the consumer.
Mr Amit Ruparel
Managing Director, Ruparel Realty
The Union Budget 2019 is optimistic for the sector. Enhancing the exemption limit for the general category of individual taxpayers will increase the buying capacity of the potential home buyer thereby providing a boost to achieve ‘Housing for All.’ Raising the TDS threshold on rental income to Rs. 2.4lakhs and bank deposits to Rs. 40,000 will be a huge relief to the taxpayers. Also, builders do not have to pay notional rent on unsold flats for two years after the year in which the construction is finished, which is a considerable step, given current scenario. We were also expecting single window clearance which would have been beneficial for both home buyers and the developers.
Mr Sankey Prasad,
Chairman and Managing Director, Synergy Property Development Services
The steps taken could percolate into direct & indirect benefits to the housing sector. The impetus on affordable housing was once again visible. I believe the proposal to extend Income Tax benefits for affordable housing schemes coupled with doubling NIL Income Tax slab from 2.5 to 5 lakhs will definitely be an impetus to the affordable housing sector. Also, exemption of tax on notional rent, on unsold inventories up to 2 years would provide relief to the Developers on the short term and help focus on newer projects.
Mr Rahul Shah
CEO, Sumer Group
The budget saw sops being rolled out for middle class and house-owners. Additionally, the tax levied on notional rent on unsold inventory will be levied after two years instead of one and house rent of upto Rs.2.4 lakh crore would not attract any TDS. There is good news for those planning to sell their houses. The budget missed considering the long pending request for granting industry status to the sector, which will go a long way in helping the sector and also lowering of the GST rates.
Ms Mini Nair
Essel Finance Home Loans Ltd CEO & Executive Director
As expected, this is a populist budget. The government has succeeded in maintaining the fiscal deficit less than 3.5%, just 0.1% above the expected levels. The Direct Tax exemption limit for the salaried class has been raised to Rs 5 lakh per annum, and someone having Rs 6.5 lakh per annum as salary, will have zero tax liability. Moreover, the move taken to grant exemption to tax on the Notional Rent on the second home would help the middle class to invest in second homes. Meanwhile, the Capital Gain Tax exemption under Section 54 has been raised to Rs 2 Cr is also a welcome change.
Mr Madhusudhan G.
Chairman and MD, Sumadhura Group
"On many fronts this is a favourable and bold budget for the real estate industry. Though many of the expectations, whether it is bringing in a structured single-window clearance or granting infrastructure status to the industry didn't materialize, however the government’s stance towards reducing the GST burden on homebuyers is seen as a welcome move. "
Mr Anoop Kumar Mittal
"The Government’s endeavour to significantly reduce the tax burden on home buyers is highly commendable. Extending benefits, under Section 80-IBA of the Income Tax Act for one more year, is a welcome move to alleviate stress on the real estate sector and to make housing affordable. In addition to this, setting up the 22nd AIIMS in Haryana reflects the Government’s intention to offer affordable healthcare to the masses."
Director, Grant Thornton Advisory Private Limited
“The Budget highlights Government’s agenda of boosting demand in the real estate sector by creating a positive mood for both consumers and developers. Announcements in the form of tax rebates, capital gains exemption on roll over provisions on residential property (selling one house and purchasing a new one) enabling retail buyers to purchase 2 residential properties, no notional rent for second self-occupied house property should boost disposable income in hands of individual taxpayers. Proposal to not tax notional income on unsold inventory of developers for 2 years from current 1 year at present and extension of tax deduction for affordable housing projects by another year should also boost the sentiments of developers.”