Relaxed taxes on ready inventory may not help realty sector: Analysts

The government’s move to relax taxes on notional rent on unsold ready inventory to two years is unlikely to help property developers much due to lower absorption of units and the liquidity crunch they are facing, analysts said.

Many developers are facing financial challenges after the IL&FS defaults, after which non-banking finance companies — the major financiers to real estate firms — slowed disbursals.

“Given that the industry is reeling under the pressure of unsold inventory, the relaxation on notional rental income to two years is expected to provide marginal relief to developers who are already under stress,” said Amish