By Ganesh Vasudevan, CEO, IndiaProperty.com
The Real Estate industry hopes that the Union Budget for 2017-2018 which comes just a few months after demonetization plus a lacklustre year will help realty recovery. Need of the hour is a sweeping change in the existing tax structure to reflect the current property prices. Restructuring of the Income Tax slabs, an increase in tax rebate on interest amount paid as home loan and additional incentives for first time home buyers are three of the biggest expectations from this budget.
Tax incentives along with liquidity in the hands of consumers would encourage them to invest in real estate. There should be a separate deduction applied to the principal instead of lumping it under the broad investment avenues of Section 80C. This will not only encourage more people to invest in properties thereby stimulating the sector but also motivate people to invest in other long term savings like PPF, ELSS etc.
The industry also needs clarity on the Goods and Services Tax (GST). It is meant to simplify the taxation system with one single tax, but stamp duty will not be a part of the GST. Stamp duty shouldn’t be charged separately and in the future it should also be a part of the GST. Also, the Real Estate Regulatory Act was passed in 2016, but its full impact is yet to be felt. The powers that be should ensure that the regulatory framework for implementation of the act is put in place.