The ruling Government is all set to present the Union Budget 2016 on February 29 2016. The budget will be presented by Union Minister for Finance Mr. Arun Jaitley with integral focus on promoting entrepreneurship and manufacturing and rationalizing tax regime. The union budget estimate for this current financial year shows a clear picture of non-Plan disbursement estimations for the Financial Year are appraised at Rs.13,12,200 crore and plan expenditure at Rs.4,65,277 crore. Total Outlay has accordingly been expected at Rs.17, 77,477 crore.The necessities for expenditure on Defence, Internal Security and other compulsory expenses are effectively provided.
The expectations for real estate sector from this budget is manifold and multi-dimensional. Let’s have a quick rundown on it.
1. Rent Improvisation
The Union Budget needs to offer tax encouragements for leasing out of built-up units. Presently, rental earnings is counted as elementary taxable revenue. It is assumed tax breaks definite to rental inflow of fund will provide with a substantial lift to house resting affair in India and support toescalate rental source in the urban and sub-urban areas of the country.
2. Execution of Real Estate Regulatory Bill (RERA)
The endorsement and sanction of the awaiting Real Estate Regulatory Bill was postponed once again only in recent times. RERA is expected to be executed with immediate effectin order to make the Indian real estate space look lucrativetoglobal stockholders. The forthcoming Union Budget should make extra efforts to make this indispensably required policy come in action.
3. Good and Service Tax
Presently people investing in properties are expected to pay a series of taxes like registration fees, service tax, excise, VAT and stamp duty. The government should ensure fast processing and sanctioning of Goods and Service Tax or GST which will combine all these tax components under one tab. This will definitely benefit the consumers and end users.
4. setting up of Real Estate Governing Body
Provisions for establishing and setting up an apex body for real estate issues, concerns and challenges is also expected from the Union Budget.
5.Expedition of Approvals of Real Estate Projects
Promoters have been demanding for a quicker project authorisation procedure. Expedition of endorsements would modify the source pipeline, support tolessen the prices and also safeguard that this domainstay feasible as a developing industry. This union budget should offer appropriate respite on this area, while concurrently confirming that structure quality standards are non-negotiable.
6. Motivation to FII Participation in Infrastructure
India still lacks in infrastructural supplies and the country needs big players’ especially global names to offer capital and bridge the deficiency. The Union Budget should make and offer all provisions that will encourage foreign investors to capitalise in real estate space of India.
The other important expectations for this real estate sector from the upcoming budget are;
1)Relaxation or Liberation of Counter-Productive Clauses in LARR i.e. Land Acquisition, Rehabilitation and Resettlement Act.
2)Regulation of construction raw material costs
3)Reduction in the cost of property registration
4)Drop in lending rates for developers
The big question whether all these potentials will turn into actualities is in the minds of everybody. The only way out to know this is to wait till the end of this month and understand the nitty gritties of the Union Budget.