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Govt allocates Rs 22,407 cr next fiscal for housing

Rationalisation of capital gains for REITS

BS Reporter  |  New Delhi 

For 2015-16. the government has allocated Rs 22,407 crore for implementing its vision of providing a ‘pucca’ house to every household by 2022.

While presenting his second Budget, said the government planned to build 60 million homes — 40 million in rural areas and 20 million in urban areas — under the ‘for All’ programme.
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Harpreet Singh, partner (Risk Advisory Services), PwC India, says: “The announcement of 60 million units is encouraging but needs to be backed by strong policy directives in the area. Very little has been done on ground in this direction by earlier governments. We have to understand the implementation strategy that should back such announcements.”


 
Also, the rationalised the regime for the sponsors exiting at the time of listing of the real estate investment trust (Reit) and investments trusts (InvITs) units, subject to payment of securities transaction tax (STT).

“A step was taken in the last to encourage and InvITs by providing partial pass-through to those. The collective investment vehicles have an important role in reviving construction activity. A large quantum of funds is locked in various completed projects. This needs to be released to enable new projects to take off,” he said in its speech.

The rental income arising from real estate assets directly held by the was also proposed to be allowed to pass through and to be taxed in the hands of the Reit unit holders, Jaitley said.

Surabhi Arora, associate director, International, says: “The rationalisation of the tax regime for is a positive move. This will help make more financially viable for Indian markets, and further push introduction of such trusts in the Indian market.”

Real estate players like have already announced plans to launch in the next financial year. The move will help those like K Raheja, Unitech and other firms with large commercial assets. The real estate industry has been demanding further tax clarity to launch those for their commercial assets. Both the trusts can be listed on stock exchanges, and enabling domestic and overseas investments to come in the country’s real estate and projects.

are similar to what is allowed in developed markets like the US, UK, Japan, Hong Kong and Singapore. These can be listed and trading is allowed in their units like any other security on stock exchanges. InvITs are also set up for similar purposes. In September last year, market regulator SEBI had notified norms for listing of and InvITs.

Shishir Baijal, chairman and managing director, India, says: “The did mention ‘for All’ but it did not have a game-plan attached to it. Additionally, no sops or exemptions for home buyers were given. Also, there is little on easing liquidity for real estate with only partial relief for

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