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Budget 2021-22 wishlist: Here are the key challenges in real estate sector

Given the market / pandemic situation, there is an overall fall in the fair market values of properties

Topics
Budget | Indian Economy | Real Estate

Business Standard  |  New Delhi 

construction, real estate
.

Key challenges

  • Given the market / pandemic situation, there is an overall fall in the fair market values of properties. The reckoner values (circle rates) have pretty much remained at the pre-Covid levels. Such a situation leads to tax being calculated on deemed income basis.

  • Pre-sales have reduced significantly due to lack of customer confidence on delays in project completion. This has created liquidity issues with residential developers.

chart

Industry ask


chart

  • transactions (immovable property or shares of property companies) between non-related parties to be exempt from deemed income provisions [such as 56(2)(x) and 43CA]. The fall in market value due to the pandemic is much more than the safe harbour currently provided under these provisions.

  • Reduction in stamp duties in some states led to significant increase in demand. To enhance the demand further across the country, a long-term capital gains exemption could be provided on all under construction properties purchased during FY 2021 / 22. With reduced stamp duties and no capital gains, it would be a great incentive for property buyers and would also boost the GST collection.

  • In view of the enhanced focus on the digital economy, there will be a need for high quality data centres. Tax incentives for developers undertaking data centre projects would help in providing the initial boost to this niche asset class.

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First Published: Sun, January 10 2021. 22:42 IST
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