Top 5 Expectations from Union Budget 2016-17

Out of the five major initiatives that are most likely to get a boost in the upcoming budget, GST Bill received maximum responses from the realty stalwarts in the Budget Expectations Survey 2016-17 conducted by CommonFloor.com. The survey received an overwhelming response with as many as 278 experts participating in it.

Union Budget for the current fiscal is just round the corner. Like every year all eyes are set on the finance minister for what he has in store for all. Real Estate sector, in particular, is most eagerly waiting for the Budget announcements as it holds the key to this sector’s unprecedented growth. Contributing an average of 6 per cent to the nation’s GDP, this sector has grown by leaps and bounds over the past years.
As per the survey, removal of multiple taxes is what industry is in dire need of as about 25 per cent respondents voted for it. With a prolonged approval system plaguing the sector, second spot was secured by single-window clearance with 17 per cent votes.

While the industry wish list is quite long, here are top five expectations or rather dreams of the sector that might turn into a reality this year.

1. The Goods and Service Tax has been doing the rounds since the last two sessions of the parliament yet never made out on a positive note. At present, home buyers need to pay service tax, VAT as well as stamp duty while buying a property. All these accounted together burn a deep hole in the buyers’ pocket. Thus, passage of GST is the need of the hour as it will significantly help in substituting numerous taxes with a single tax.

2. With a prolonged approval system in place, single-window clearance is also making lot of buzz. At present, it could take anywhere from 18 to 36 months before beginning any project. The major hurdle in timely delivery of properties occurs due to delay in project approvals. Thus, an online single window clearance with bare minimum human interface and set deadlines for approvals will ensure timely possession and will also bring down project cost to a certain extent. Going online will curb any scope for undue gratification pertaining to approvals and thus promote transparency in the system.

3. Like every year, industry status for the sector is also in the wish list. Once accorded, developers will be able to avail legitimate finances from the financial institutions without much hassle. Realty stalwarts are of the opinion that ‘industry’ status would act as a catalyst in promoting affordable housing as the cost benefits will finally be passed to the consumers. With real estate sector contributing nearly 7% to the country’s GDP, it is high time that the sector gets the ‘industry status.’

4. Exemption limit on interests on home loan secured the fourth position in our list. Government should raise the home loan principal repayment exemption limit up to Rs 5 lakh from present Rs 2 lakh from taxable income under Section 80C/80CCC/80CCD. Considering the current scenario of the market where unsold inventory is piling up, this revision in the taxation policy will prove as a silver lining in the cloud. It will promote buyers sitting on the fence to take the plunge, thus impacting the sales positively. Moreover, logically speaking, Rs 2 lakh limit seems legitimate for Rs 20 lakh home, which is a price tag really hard to find in metropolitan cities.

5. Last but certainly not the least, with the mission of achieving housing for all by 2022, government should also focus on the special benefits to promote affordable housing. A limit should also be set for principal loan repayment from Rs 1 lakh at present, which would have a positive impact on encouraging purchase of homes, especially first time buyers across the country. Moreover, realty experts are also demanding that Section 80 IB (10) should be reintroduced. As per this section, housing projects with a maximum built up area of 1,000 sq.ft. in Delhi and Mumbai and 1,500 sq.ft. in other place are eligible for 100 per cent exemption of income tax.

So, what do you think will become a reality this budget? Share your expectations in the comment box.