Anuj Goel Pune | Highlighters of 2020 Budget on Real Estate Segment

This year's budget was holding high demands and expectations from everyone especially, the construction and real estate sectors. But initially it displeased the real estate industry. The Finance Minister addressed the budget keeping the universal motto highlighted that calls- Sabka Vikas and Housing for all by 2022. 

Annuj Goel Pune, Director at Goel Ganga Developments finds major pros and cons and its impact on the construction sector. He says that while short term gains may not be in sight, but long term benefits are on the horizon. He further mentions that the budget was evenly balanced and tried to pacify all sectors. 

We all are aware of the hardships experienced by the real estate industry from the last few years. The stacked up inventories reduced sales, and much more are affecting this infrastructure business. The budget invoked a mix response from the realty sector. While the entire industry was elated with the government’s continued emphasis on affordable housing and tax holiday proposals. Still, it has the inadequacy of specific steps to fix the liquidity crisis faced by the realty sector. The main pointers highlighted for this sector can be summed up as:

·        Budget allocation to housing and urban affair as well as the government’s flagship scheme PMAY observed an extension of 18.39% and 8.5% respectively. 

·        The government is maintained its focus on “affordable housing”. The budget proposed to extend “tax holiday” to builders engaged in developing affordable housing projects. This proposal seems to help for famed developers such as Goel Ganga Developments. The group holds a significant place in the affordable housing section of Pune's real estate.

·        The budget also provides a concession to real estate transactions by increasing the circle rate limit to 10% from the existing 5%, thus providing tax benefit from capital gains.

·        An additional discount of 1.5 lakh for interest paid on home loans is raised by one more year to boost the purchase of affordable projects. Anuj Goel Pune considers it to be a strong factor in supporting the demands, which is coupled with the introduction of new personal income tax slab rates.

·        Cooperative societies and NBFC too received monetary incentive in form of concessional tax rates. This freedom from the ambit of Minimum Alternate Tax (MAT) and reduction of asset and loan size makes it eligible for debt recovery under SARFAESI act, 2002. 

Talking about the contradictions, the crisis that was aired in the year 2016 with the launch of RERA, GST and NBFC’s has still not expedited with this year's budget. The government tried hard to walk with an equitable approach to control the hardships of this industry. 

Moreover, these budgetary sops are expected to support the development of under saturated residential hotspots in Pune such as Undri, Dhanori, Wakad, Nibm, and Tathawade. Through Goel GangaDevelopment reviews, the first time home buyers can get a satisfactory view of ideas about the various budgetary concessions and schemes available at their disposal to cherish dreams.