PUNE: The Budget 2020 failed to impress the ailing real estate sector as there were no major industry-specific announcements. Apart from extending tax benefits of Rs 1.5 lakh on interest of home loans taken for affordable homes (value up to Rs 45 lakh) by another year, i.e. March 2021, and personal tax relief, there were no major benefits for the sector.
Confederation of Real Estate Developers Association of India (CREDAI) National President Satish Magar said, “Budget 2020 has not been encouraging for the sector, which needs immediate attention from the government. As an industry, we expected bolder steps to revive the sector such as providing more liquidity, one-time restructuring of loans, and tax deductions on home loans to give impetus to buyer sentiment.”
“Unfortunately none of these issues have been addressed, except providing tax holiday for one more year for affordable housing developers and loan sanctioning - which was due for some time,” added Magar.
Experts feel lack of major announcements might result in slow recovery of the sector. Gera Development Pvt Ltd Managing Director Rohit Gera said, “The move to provide more money in the hands of taxpayers and elimination of dividend distribution tax is welcome. The government has continued down its stated path of removal of exemptions and deductions and as a result, has not provided the necessary stimulus needed to boost the real estate sector.”
He said this could translate into a slow recovery with more pain for many home buyers and developers.
Terming the Budget a ‘disappointment’, CREDAI-Pune Metro President Suhas Merchant lamented lack of stimulus for growth and substantial provisions for luxury or affordable housing. Provision of infrastructure cost will show benefits after a few years.
Shrikant Paranjpe, former president, CREDAI-Pune Metro said, “We’ll have to wait and see the impact of the changed tax slabs for taxpayers. Also, instead of the Dividend Distribution Tax (DDT), dividend will be taxed at the hands of investor individuals, which will not make much difference as their net savings may not increase much.”
Goel Ganga Development (I) Pvt Ltd Managing Director Atul Goel termed the income tax sops as a consolation in a budget that had ‘nothing for real estate sector’. “The long pending demand of industry status to real estate sector has been denied this time as well,” he said, though he welcomed the tax holiday on affordable housing by another year.