India Budget 2018
2017 was a turbulent year for the Indian real estate sector and one marked by change in the form of the aftermath of demonetization, the promulgation of the Real Estate Regulatory Act (RERA) and the introduction of the GST regime. Our wishlist from Budget 2018 would be the inclusion of the RE sector in its entirety under the ambit of GST. The rate of tax on specified affordable housing schemes has been notified as 8% which is still quite high and could be reduced to 5% instead to provide the necessary boost towards truly achieving ‘Housing for All’, a priority initiative for the Government. Incentives for first time home buyers under 80EE was restricted to properties valued at INR 50 lakhs or less. The reality of prices exceeding this amount in most metro cities suggests that the limit can be inreased such that benefit to first time home buyers are achieved in both letter and spirit. 2017 also restricted the loss from house property to INR 2 lakhs (which was unlimited earlier) which has severely curtailed the demand and investment rationale for second home properties as income yielding assets.
Mr Khushru Jijina is the Managing Director of Piramal Finance & Piramal Housing Finance