FM must reduce overall income tax: CommonFloor Poll
On 16 May, with clear majority, the Hindu nationalist BJP tsunami swept the entire nation. Though this historical win added another glorious page in the Indian history, several interesting incidents that preceded soon-after the election results raised people’s expectations from the new Prime Minister.
With the euphoria of Mod-fied India, Sensex appreciated past 25K mark and the rupee that was caught in the whirlwind recovered to 58.68 against the US dollar. Thus, hopes are now pinned on the upcoming budget that is expected to infuse some positivity in the market that has been plagued by the economic malaise.
In this backdrop, CommonFloor conducted a survey capturing common man’s opinion on what should be the top-most agenda of the Modi-led government in the upcoming budget. Here’s a snapshot of the poll result.
A whopping 66 per cent respondents felt that overall income tax reduction is a must for the much needed fillip for the real estate sector as opposed to incentives for the first time home buyers. As the overall reduction in the income tax will directly lead to more disposable income in hand. This will significantly increase the number of transactions, which in turn will make the realty market active again.
With SEBI releasing a paper to re-introduce REITs in India (October’13), it became the buzzword for the realty market last year. Though it opened a room for a wide discussion, it also tickled the fancies of people who had the intent to invest in real estate, but due to low or no expertise were holding themselves to take a plunge in the market. Also, SEBI’s proposal to reduce the minimum investment amount from Rs 25 lakh to Rs 2 lakh was much-appreciated. However, certain tax sops are still necessary for REITs to work in the Indian market.
Thus, about 10 per cent respondents felt that exemption of taxes for those investing in REITs should be the priority in the upcoming budget.
Be it due to the payment ease, reduction of costs accrued due to unending delays or due to no EMI burden till possession, whatever be the reason, several home buyers are enticed by the subvention schemes. Thus, making subvention scheme more attractive for the first-time home buyers also secured 10 per cent votes.
Currently, the service tax on under-construction residential properties with carpet area of less than 2,000 sq.ft. is 3.09 per cent. It adds a considerable amount to the overall property cost. Thus, scrapping the service tax on under-construction properties along with tax incentives for affordable housing loans were voted as priority by 7 per cent respondents.
As a last word, from this poll CommonFloor can deduce that people are eagerly waiting for overall income tax reduction as it impacts the country at large, as opposed to sops for first time home buyers. And what actually awaits for the real estate industry will only be unveiled on 10 July when Jaitley opens his budget box.
