Real Estate Industry Welcomes “Aatmanirbhar" Package 3.0

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"Finance Minister Nirmala Sitharaman's stimulus measures in terms of income tax relief for buyers and developers is very timely and will further boost the housing demand in the country. The additional outlay under PMAY will help the completion of stuck projects, create new jobs, and boost demand for raw materials” stated Manju Yagnik, VCP Nahar Group and Senior Vice President, NAREDCO Maharashtra. Providing an additional outlay of Rs 18,000 crore for PM Awaas Yojana is a direct intervention and would stimulate homebuyer’s sentiment under the affordable housing sector besides having a multiplier effect on direct employment and growth of real estate allied industries agreed Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd . “Differential above 10 per cent between circle rates and agreement value translates into tax penalties under Section 43CA of the Income Tax Act. This has been a major stumbling block for price rationalization. However, with a cap on the flat value to be eligible for this - Rs. 2 crore, most projects in Metro Cities will not be able to take advantage of this. The ideal situation would have been one, where this relaxation would be applicable to commercial real estate transactions as well. Real estate and end-users, both would benefit if these two suggestions can be incorporated, said Dr. Niranjan Hiranandani, President, NAREDCO and ASSOCHAM. CREDAI President Satish Magar said, “The one-year moratorium on principal payment is encouraging however, the restriction of SMA 0 accounts will deprive many borrowers particularly real estate developers. CREDAI hopes that the Government in line with real estate sector demand would reconsider the restriction of SMA 0 accounts. CREDAI has been requesting Government to increase the permissible difference between selling price and circle rates (till 30 June 2021 )as this would help developers to offload long standing unsold inventory without having any liability under section 43CA for developer and under section 56 (2)(X) of IT Act for homebuyers. “Recognition of real estate as a core sector, creating ancillary industry demand and employment, and enhanced PMAY – Urban allocation, will boost the housing demand in the country. Besides, the increase in circle rate and transaction value threshold from 10% to 20% will remove a transaction hurdle and save tax thereby increasing the opportunity for unbridled property purchase activity,” stated Shishir Baijal, Chairman & Managing Director, Knight Frank India. Lincoln Bennet Rodrigues, Founder and Chairman, Bennet & Bernard Group considers real estate to be a clear winner. "The income tax relief will ensure tremendous liquidity into the market and the measures will incentivize people to buy homes and is a win-win situation for both developers and home buyers. The reduction in bank guarantees for construction activity will also ensure availability of additional liquidity providing major relief to the industry." “Income Tax relief for developers and home buyers will encourage transactions and attract first time homebuyers. In addition to this, the infrastructure debt financing support announced by the government in the form of RS 6000 Cr equity will attract more investments in infrastructure development. All these measures will collectively improve India's competitiveness and will go a long way in boosting the initiative to build a ‘Self Reliant’ India” said Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa. Anuj Puri, Chairman, ANAROCK Property Consultants commented that the announcement has given a major boost to residential real demand amidst the ongoing festivities. For homebuyers, it is a clear added financial benefit to round off the existing offers and discounts. Additionally, the consequential relief up to 20% to buyers of these units under Section 56(2)(x) of the IT Act for the said period will definitely boost demand, especially in the affordable and mid segments.” Ashish R. Puravankara, Managing Director, Puravankara Limited said, “Industry-wise, the increase in threshold limit for circle rate and transaction value will help developers, especially in the Mumbai market. From the buyer’s perspective, this, along with the Income Tax relief, will encourage fence-sitters to expedite their decision to buy/ invest in a home." Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani was of the view that the income tax relief measure has further provided a thrust to the sector. “The move is bound to encourage new buyers. The announcement also provides relief to the developers as the tax liability is reduced. The announcement of Rs 18,000 crore additional outlay for the urban housing scheme to help complete real estate projects would also create jobs, positively impact the allied industries and boost the overall economy. Fundamentally, its an announcement in the right direction with a win-win situation for developers and home buyers.”